THE BIG BANKS’ PR PROBLEM

The New York Times’s Andrew Ross Sorkin has an article about the image problems that the big banks are facing right now. He asks whether it is a temporary problem or something much worse, and looks to the Move Your Money project as a sign that, for the big banks, things are serious.

And the public outrage so far doesn’t seem to have dented business, except around the edges. But it soon may.

Several private equity and hedge fund units within firms like Goldman and JPMorgan have slowed efforts to raise capital until more clarity emerges about proposed regulations like the so-called Volcker Rule, which would forcibly separate those businesses from their firms. Bank of America, trying to score some points with customers, announced a plan to eliminate overdraft fees, a move that will likely cost the firm tens of millions of dollars in annual revenue.

Arianna Huffington of The Huffington Post recently helped start a campaign called “Move Your Money” to persuade the public and businesses to transfer their money from big banks like Bank of America and JPMorgan to community banks. So far, it seems to be working, at least in small numbers: the City Council of Los Angeles recently approved a bill that requires banks to reinvest in the community.

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