Banking has the largest lobbying force in DC, so why are you surprised?

So this morning is more of a rant and less of a blog. So, forgive me in advance. However, in a previous life I was a regulatory advisor for one of those behemoth national banks and they work hard to keep make money and more money. Yes, they hire lobbyists help the politicians look the other way. And, yes, they hire law firms to block for them when the politicians choose to examine what is going on. My question is this -- why are people acting as though they are SHOCKED SENSELESS by the further consolidation of the financial sector?

I do not get it. I am genuinely perplexed why anyone would think there is anything amiss in last night's purchase of Wachovia by Citi. The writing has been on the wall since the late 80s after several financial institutions failed and then the subsequent scandal ensued. For those who do not know...there WILL be only a small handful of national banks by 2020 (perhaps 3) and there is not enough anti-trust legislation in the world to stop it.

Regional banks have long consolidated their positions in order to leave a larger footprint on their respective markets. Bank of America started doing this on the west coast more than 60 years ago and it really got into its stride under Hugh "Huge" McColl and now Ken Lewis is really hitting his stride with his growing leviathan. But, not to make BofA the bad guy, because they are not. Their acquisitions have helped their stock holders and their bottom line. Yes, it has had its snaffus, like several pesky investigations into its audit procedures or their handling of credit disputes or their questionable underwriting, however, that is to be expected. however, that will happen anytime a company consolidates its position. BofA stretched its tenacles to the east coast with their acquisition of NationsBank, their reach into the north with Fleet and into the midwest with MBNA and not to mention the other significant acquisitions of Countrywide or LaSalle or US Trust or of any number of brokerage houses. No one said a WORD.

Citi has been doing the same thing for a similar timeframe. They have eaten at the table of excess and are still sitting there grubbing. Why? Because Citi can and for that matter, so can BofA. The federal government cannot stop them because their bottom lines are healthier than that of the fed and they probably have better credit ratings. Now, Citi has acquired Wachovia and instead of saving a financial institution teetering on the edge because of the heaviness of its mortgage/real estate portfolio, people are getting a little worried. Why? Are people NOW concerned that credit will be more difficult to acquire by those without existing relationships? Is the American public concerned because they see that in the words of the Highlander, there can be only one (and by that I mean bank)?

I think that in the end, BofA and Citi will co-exist in a type of Nirvana of their own making. BofA will control individual banking and trusts and have a significant chunk of the credit world (and by that I mean a 20-25% share). Citi will own consumer credit (more than 50%) and further extend its reach into the international market where other nation states have even freer financial legislation. I say, go for it. Why not? They already have the lobbyists, the attorneys and the federal government on their side. They cannot possibly do anything worse than what has already been done. The federal government will not allow them to fail, so they are as safe a bet as any. The only thing is BofA, Citi, others of their ilk and their respective executives have a huge appetite, let us just hope it is not an appetite for destruction.