미국 금융개혁의 정치경제: JP 모건 사례
The Political Economy of Financial Reform in the United States: The Case of J.P. Morgan & Co.
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To cure the causes of the global financial crisis-including speculation, ‘too big to fai’ problem, excessive compensation, short-selling, and perversive corporate governance-U.S. Congress passed the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) in 2010. Nonetheless, the introduction of additional reformative measures controlling the general practices of financial institutions’ excessive leverage-i.e., Volcker Rule and specific regulation on systematically important financial institutions-which are necessary to prevent the recurrence of financial crises, has been in a deadlock. To understand the current deadlock over financial reform, this essay investigates the financial reform in the 1900s∼30s when the federal regulatory framework had been formed with special reference to J.P. Morgan & Co.. The company, though a private institution, had enormous financial resources, control of major industrial companies through interlocking directorates,and personal networks of politicians and officials. There was a widespread concern that the unelected power would harm democracy. To curb the influence of the company in the Progressive era and the New Deal, the US government and Congress pushed ahead with financial reform through various political and legal actions, notably the Pujo Committee (1912), the Pecora Commission (1932) and the anti-trust litigation (1947). Against the political and legal actions, new regulatory institutions, such as the Glass-Steagall Act, was able to introduce, being a decisive contribution to restrain arguably the strongest financial company in the early 20 century and to reduce the likeliness of financial crises’ recurrence. Therefore, the case of J.P. Morgan reminds us why and how political and legislative support are required to acquire the power for financial reform, which is difficult to promote because of the regulator’s being captured by the financial institutions’private interest.
Abstract
To cure the causes of the global financial crisis-including speculation, ‘too big to fai’ problem, excessive compensation, short-selling, and perversive corporate governance-U.S. Congress passed the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) in 2010. Nonetheless, the introduction of additional reformative measures controlling the general practices of financial institutions’ excessive leverage-i.e., Volcker Rule and specific regulation on systematically important financial institutions-which are necessary to prevent the recurrence of financial crises, has been in a deadlock. To understand the current deadlock over financial reform, this essay investigates the financial reform in the 1900s∼30s when the federal regulatory framework had been formed with special reference to J.P. Morgan & Co.. The company, though a private institution, had enormous financial resources, control of major industrial companies through interlocking directorates,and personal networks of politicians and officials. There was a widespread concern that the unelected power would harm democracy. To curb the influence of the company in the Progressive era and the New Deal, the US government and Congress pushed ahead with financial reform through various political and legal actions, notably the Pujo Committee (1912), the Pecora Commission (1932) and the anti-trust litigation (1947). Against the political and legal actions, new regulatory institutions, such as the Glass-Steagall Act, was able to introduce, being a decisive contribution to restrain arguably the strongest financial company in the early 20 century and to reduce the likeliness of financial crises’ recurrence. Therefore, the case of J.P. Morgan reminds us why and how political and legislative support are required to acquire the power for financial reform, which is difficult to promote because of the regulator’s being captured by the financial institutions’private interest.
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