Pay To Play

Said a treas'rer: "It's no dereliction,
In financing my home jurisdiction,
If the bank we pick out
For its marketing clout
May've had the odd brib'ry conviction."

Matt Taibbi, raking the financial muck in Rolling Stone, is incredulous that the too-big-to-fail "banksters", who have established a pattern of bid rigging and paying to play in municipal finance, continue to win the lion's share of new issuing business. The attitude of state treasurers toward Bank of America and JP Morgan is conveyed by California's Bill Lockyer, who said:

"I haven't found an investment bank that hasn't had some problem in the last three years. We do business with them all. I think they provide good service. I think they've been highly ethical with us."

The conclusion is that, in the interest of getting the deals done, government treasurers are willing to tolerate a rigged, expensive system. Hat tip to Arthur Cutten of Jesse's Café Américain.