Finance, not protest is taming the banks

So did the Occupy Wall Street movement have any effect? No, says Stephen Foley

There was a feast in Zuccotti Park on Christmas Day. Protesters munched on Christmas cookies, pasta and turkey sandwiches, and sang a rousing rendition of John Lennon's Imagine, summoning for a moment the spirit of the Occupy Wall Street (OWS) movement that began in this park in Manhattan's financial district 100 days earlier.

These days protest activity in the park is a sorry shadow of the OWS heyday, when it looked like becoming an immovable tent city, whose warren of streets were lined with activists pushing left-wing causes and messages. Of course, it did not prove immovable, and New York sent its police force in to remove the tents, as did other cities across the US. Now, protesters are allowed into the heavily guarded square, but they are not allowed to sleep there, and Zuccotti Park yesterday contained just two activists with a collecting tin.

On the other side of the Atlantic, the copycat encampment outside St Paul's cathedral in London is into its third month and planning a New Year's Eve concert to celebrate, but even that looks like petering out in January as efforts to move the protesters wend their way through the courts.

The legacy of the OWS movement is the subject of as much debate as its aims and methods were during its intense, early days, but there is one question that can be answered with some clarity as this year of protest draws to a close: did OWS have any effect on Wall Street itself? And the answer is no.

That is not to say that the banks have had a great year. Quite the opposite. The US financial sector has been the worst-performing part of the S&P 500 for 2011, and the global finance industry has announced more than 200,000 job cuts this year. Just this week, Morgan Stanley, one of the mightiest investment banks, set out the details of the "rolling layoffs" it began the week before Christmas. Of 1,600 jobs going across the firm, 580 will be in New York.

Options Group, the researcher of Wall Street pay, predicts that bonuses this winter will be down by more than one-third on 2010 – but it is not street protests that are causing banks to retrench.

The reasons are financial. A new mood of caution among clients, shareholders and regulators has been crimping profits, and Goldman Sachs even reported a loss for the third quarter of the year. Wall Street reform laws enacted last year forced banks to cut back on lucrative proprietary trading, and there are new rules coming to curb profitable inter-bank derivatives trades.

None the less, bonuses will still be large. The average managing director at a US investment bank can expect to take home a $900,000 (£580,000) bonus, according to Johnson Associates, a consulting firm. And Jamie Dimon, chief executive of JPMorgan Chase, is set to receive millions more in 2011, after his $20.8m compensation package this time last year.

Meanwhile, Wall Street's lobbying on Capitol Hill and informally in the UK, plus its efforts to influence cross-border regulations coming out of the Bank for International Settlements, have continued apace. Even slowing down the imposition of new rules is lucrative; as of the start of this month, only 74 of the required 400 regulations under last year's Dodd-Frank reform act in the US had been finalised, with 154 of them having missed their implementation deadline.

The coming election will most likely prove the test of OWS's influence. Barack Obama appeared to incorporate some of the language of the movement into his campaign-framing speech in Osawatomie, Kansas, this month. Conjuring protesters' chants of "We are the 99 per cent", the President pointed to the growing disparity between the income of the top 1 per cent and average Americans.

Four years after coming to power using similar rhetoric, Mr Obama is still using anger at unfettered Wall Street to galvanise Democrat supporters and woo independents, knowing that 72 per cent of Americans have an unfavourable view of Wall Street, according to a recent Zogby poll.

The question, though, is whether even this OWS-ish rhetoric, let alone the legislation that might flow from it, can survive through what will be the most expensive electoral campaign in history. Politicians, after all, need Wall Street's money.

Start your day with The Independent, sign up for daily news emails
Professor David Nutt wants to change the way gravely ill patients are treated in Britain
people Why does a former Government tsar believe that mind-altering drugs have a place on prescription?
Norway’s ‘The Nordland Line – Minute by Minute, Season by Season’ continues the trend of slow TV
television The BBC have commissioned a series of programmes doing away with high-production values, commentary, script or drama
Arts and Entertainment
Jonny Evans has pleaded not guilty to an FA charge for spitting at Papiss Cisse
Life and Style
Kate Moss will make a cameo appearance in David Walliams' The Boy in the Dress
The image released by the Salvation Army, using 'The Dress'
Liverpool defender Kolo Toure
football Defender could make history in the FA Cup, but African Cup of Nations win means he's already content
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable