Wallace Turbeville

Wallace Turbeville is a former vice president of Goldman Sachs and a fellow at Demos.

Recent Articles

Finishing the Job: Next Steps on Financial Reform

(Flickr/Medill DC)
Now that we know that the president will not be someone who pledged openly to repeal Dodd-Frank, it's time to look forward to the agenda for the next four years. One thing is certain: The job of reforming Wall Street is far from finished. The most profitable investments for the big banks continue to be Washington lobbyists chipping away at reform and litigators challenging every major rule in court . I see three topics on the agenda: Unfinished Business; Defending Won Territory; and New Initiatives. A few of the major agenda items for each are described below. Unfinished Business The single most important holdover from the Dodd-Frank implementation process is completion of the Volcker Rule regulations . Unlike other financial reform that curbs activities, the Volcker Rule prohibits federally insured banks from engaging in specific business lines: proprietary trading and investment in hedge funds and private-equity funds. It should have been completed in July, but the war of words and...

Finally! Schneiderman Goes After JP Morgan Chase

New York Attorney General Eric Schneiderman, with the support of the mortgage task force formed by the Obama administration last January and the Justice Department, has commenced the long overdue prosecution of the Big Banks for their role in triggering the financial crisis of 2008. (That is not a typo—the Justice Department has finally moved against the Big Banks.) The case is a civil proceeding for unspecified damages against JP Morgan Chase, as successor to Bear Stearns (which it acquired with the backing of the Fed in 2008). It alleges systematic fraud against the buyers of residential mortgage backed bonds prior to the merger. Schneiderman deserves praise for leading the effort. It is a welcome counter to self-serving assertions of Fed officials that the investors should have understood the risks that they were getting into. Even now, the allegations in the Complaint stir outrage, though most have been known for many months. Bear Stearns bond-marketing documents are cited for...

The LIBOR Scandal's Lies

While regulators should have done more, it’s the banks that must be punished for their manipulation of interest rates.

(Flickr/Hugeword Picture)
The days between the Fourth of July and Bastille Day on the 14th are known for fireworks on both sides of the Atlantic. This year, more rockets and firecrackers than usual were going off, but they were inside hearing rooms in the British Parliament and the U.S. Congress. Barclays bank announced that it had been fined more than $450 million by regulators from both countries, and its CEO, Robert E. Diamond Jr., and COO, Jerry del Missier, both resigned. The fines were part of a settlement that granted Barclays immunity from potentially worse punishment for its manipulation of interest rates. The press reported that 10 to 12 other large banks (including HSBC, Citigroup, and JPMorgan Chase) were also under investigation. The big financial scandal of July 2012, or at least its first half, involves manipulation of the London Interbank Offered Rate, or LIBOR. The press has used a variety of estimates of the impact of LIBOR, ranging as high as $500 trillion (the Bank of England estimate) to $...

Taxing Wall Street Speculation

There's another, better way to go after the 1 percent than the Obama administration's proposed "Buffett rule."

This piece is the third in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos. As the White House mounts a major campaign to sell the “Buffett Tax” this week, there is another, better tax on the 1 percent that Washington should be considering: A financial-transaction tax—better known as a financial speculation tax (FST). A financial-speculation tax has been discussed, from time to time intensely, ever since the financial crisis of 2008 riveted attention on the markets that drove the economy to the edge of a Great Depression-quality abyss. One motivation was to make the perpetrators pay, as the public focused on bonuses at levels befitting Croesus and callous disregard for the responsibility borne by the banks for the great recession. But the financial-transaction tax is also good policy. Under the concept, financial transactions—purchases and sales of equity shares and bonds and the execution of derivatives—are taxed based, at...

The Truth about Goldman Sachs

The investment firm headed south as soon as it started prioritizing short-term gain over its long-term interests.

Former Goldman Sachs employee Greg Smith wrote an op-ed in yesterday’s New York Times that simmers with pathos. Smith describes the devolution of the culture at Goldman: Whereas in the past, the company worked in the interests of its clients, they are now seen merely as the source of transactional profit, to be manipulated for the benefit of the firm. His story emerges in the midst of a huge effort by Wall Street to eviscerate and delay the implementation of the Volcker Rule, which limits bank traders to running a client-service businesses by prohibiting trading for the bank’s own account. Having spent 12 years at Goldman prior to 1997, I sympathize with Smith’s feelings of loss and betrayal. I left just at the beginning of the institution’s evolution into its current form and have observed the process with despair—not only for the organization but for the loss suffered by the nation. Some context might provide greater meaning to Mr. Smith’s story. At its best, Wall Street serves an...