Banking Industry Still Drawing Fire Amid Continuing Reform Debate

(MoneyWatch)  On CNBC this morning, Jim Cramer ridiculed protestors demonstrating outside the American Bankers Association annual meeting in Chicago, saying "that's so 2008." The self-proclaimed advocate for small investors' disdain for the protestors is itself a demonstration of the conflicted views over banking-industry reform.

Are you still angry about the industry's role in the economy's collapse and want bankers jailed, salaries capped and business practices tightly regulated? Or would you rather Congress enact some modest bipartisan reforms and let us put the whole sordid affair behind us?

ABA Executive Vice President Bob Schmermund said today anger is still pronounced against the banking industry, but that some of it is misdirected.

"A lot of people lost their jobs, and they are very frustrated and they're very angry," Schmermund told the conference. "What the protesters may not realize is who's attending this meeting. This room is literally filled from stem to stern with traditional bankers whose life's work is dedicated to serving the needs of their communities."

U.S. Senator Dick Durbin told protestors in his home state Sunday that the financial-services industry still needs to come under greater regulation. "We need to ensure that the robber barons that are responsible for this recession don't get away with creating it and then declaring themselves a dividend," the Senate's No. 2 Democrat said.

While the cause of the today's protest may be "so 2008," the remedies are still a work-in-progress yet to fully play out. Whether it's Wall Street compensation, the timetable for credit-card reforms implementation, the regulation of sophisticated financial instruments or the question of which federal agency will have ultimate regulatory authority, much remains up for grabs in Washington nine months into the Obama administration in terms of preventions and cures.

Yet even people within the industry recognize the danger in half-measures. Ted Forstmann, founder of private-equity firm Forstmann Little & Company, warned on CNBC today that more needs to done to be ensure "certain things don't happen again. ... There's nothing that's happening now that will prevent it (another financial meltdown) from happening again."