Wall Street Reform

by: DaveJ

Mon Jun 21, 2010 at 10:55

In today's Progressive Breakfast, Bill Scher talks about this week's crunch time for Wall Street reform.  

Time's Jey Newton-Small,

"Still undecided are three key provisions ... [the] populist amendment that would require banks to spin off their derivatives desks ... it looks like some scaled back version of Lincoln's provision will be included in the final bill. Also likely to be included: the tough so-called Volcker rule ... Finally, the fate of a House provision that would create a $150 billion fund to pay for the cost of dealing with bankrupt financial institutions, paid for with new fees on firms worth more than $50 billion, remains undecided. Bankers are eyeing this week with some trepidation..."

But NYT reports Volker Rule in trouble because of lobbyists,

"The three main changes under consideration would be a carve-out to exclude asset management and insurance companies outright, an exemption that would allow banks to continue to invest in hedge funds and private equity firms, and a long delay that would give banks up to seven years to enact the changes ... they have the support of Representative Barney Frank, Democrat of Massachusetts, and Senator Christopher J. Dodd, Democrat of Connecticut ...

Bloomberg reports that the lobbyists are ready for a stealth fight through regulatory agencies if the bill passes,

"If the bill passes in roughly the form being negotiated by House and Senate lawmakers, regulators will be directed to write hundreds of new rules, conduct dozens of studies, combine two banking agencies and bring industries such as mortgage brokers under federal oversight for the first time. The process will take place in an arena where technical knowledge and relationships with regulators take precedence over old-fashioned legislative arm-twisting."

(Note, the "Volcker Rule" restricts banks from certain trades if they are not on behalf of their customers, prohibiting them from owning and investing in "alternative" funds.

Citibank doesn't care.  Several outlets are reporting that the bank is raising $3 billion just for this purpose.

"Citi must be comfortable enough that whatever happens, even in the extreme version, they'll be able to move ahead with these businesses," said Steven Kaplan, a professor at the University of Chicago Booth School of Business who studies the private-equity industry. "I don't think any of these bills envisioned not being able to manage someone else's money. It's the bank capital that's still an open question."
DaveJ :: Wall Street Reform

Tags: , , , (All Tags)
Print Friendly View Send As Email

Love that euphemism (4.00 / 1)
they have the support of Representative Barney Frank, Democrat of Massachusetts, and Senator Christopher J. Dodd, Democrat of Connecticut

Translation for English speakers: the banks have bought Mssrs. Frank and Dodd with sufficient funds that these gentlemen now believe the banks position is in the best interest of the country. If voters had enough money to buy these gentlemen, they would change their opinions, of course.

Instead of "they have the support of" journalists should be forced to write something like, "in response to $x million in donations from banks and insurance companies, they have the support of" where they have to look up and report the total amount of donations.


Open Left Campaigns



Advanced Search

Powered by: SoapBlox