Chanos says Obama speaks loudly, banks not scared

NEW YORK, Oct 29 (Reuters) - James Chanos, the famed short seller who early spotted Enron's fatal flaws and who now lobbies U.S. lawmakers on regulatory policy, says the banking industry will probably avoid any serious reforms. In the wake of the mortgage crisis and last year's market collapse, an angry public called for tougher rules on banks needing trillions of dollars of aid. The Obama administration came into office with expectations that it would reform Wall Street and restore soundness to banks. Instead, financial services executives have found they have little reason to worry, Chanos told a panel discussion hosted by the New-York Historical Society on Wednesday night. "This is an administration that speaks loudly, but, quite frankly, no one fears in terms of financial regulation," said Chanos, president of hedge fund firm Kynikos Associates LP. "Congress has been so co-opted by the financial services industry that we are seeing real attempts at real reform being derailed every step of the way." Illustrating this balance of power, Chanos said, was when President Obama came to New York's Wall Street and in a public speech admonished the banking industry one year after Lehman Brothers collapsed and went into bankruptcy. No major bank chief executives were in attendance that day, he said. (Reporting by Joseph A. Giannone; Editing by Lisa Von Ahn) Keywords: FINANCIALREGULATION/CHANOS ([e-mail]; [phone]; Reuters Messaging: [e-mail] ) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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