“The world adjusts to stupid laws,” said the former New York City mayor. “They don’t pay any attention to them.”
Michael Bloomberg walks through the crowd outside City Hall as he leaves for the last time as mayor of New York, on Dec. 31, 2013.
Carlo Allegri / Reuters
Michael Bloomberg is back in his natural habitat: winning spontaneous rounds of applause on Monday at the annual conference of the securities industry, railing against financial regulations he considers badly written and overly restrictive.
The former mayor has returned to the leadership of Bloomberg LP, the media and financial information giant he founded. And he has maintained his unabashed advocacy for the financial industry, perhaps even more so as he runs a company that depends on that industry for its $8 billion in annual revenue.
Bloomberg's view has been consistent: If and when government regulates, it should take the advice of knowledgable people (typically insiders) and not listen too much to elected representatives in Congress. "The administration should have sent out a carefully crafted, consistent, well thought-out piece of legislation," he said of major legislative packages like the Dodd-Frank financial reforms and the Affordable Care Act. It should have been "created by the people who really understand how the world works, how financial services work, and went to Congress and maybe you tweak it a little bit and you get it through."
The current financial rules "can be dysfunctional," he said. "You don't write a piece of legislation that way by letting Congress do it."
The proliferation of new rules and requirements for storing and measuring communications and trading positions is a boon for service providers to the financial industry, like Bloomberg's own company. "It's good for the terminal business," he said. "Some of these firms have 10 or 15 thousand people working on [compliance]; if that's not an opportunity to provide software, I don't know what is."
Bloomberg has rolled out services beyond its traditional chat and data offerings, including Bloomberg Vault, which stores data, trades, and communications required by some of the new Dodd-Frank rules, as well as its own trading venue for financial instruments known as swaps, which handled nearly 150,000 trades worth some $6.6 trillion in its first year of operating.
The risk with what Bloomberg sees as poorly written and confused rules is that banks and other companies simply won't comply with them. "Complying with it is really impossible, which means you're not going to comply with it. The world adjusts to stupid laws, they don't pay any attention to them and you get burned later on, like a 25 mile per hour speed limit," Bloomberg said, getting more laughter and spontaneous applause with a jab at one of the signature policies of his successor, Bill de Blasio.
He also criticized the large fines meted out to banks in recent years. "Some of these fines I think are outrageous and shouldn't be allowed to take place," he said.
Bloomberg adamantly defended the industry in the face of its pre-and-post crisis scandals. "Things have chagned dramatically for the better for the public," he said, but "you wouldn't believe that if you read the newspapers." And he said more regulation could mean a financial system that does less to stimulate the broader economy. "If you reduce the risk, they can't make the money, they can't provide the financing that this country and world needs to create jobs and build infrastructure and all of those things."
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