Senate Democrats Spar Over Wall Street Reform

[avaistheone1]

On Friday, a provision that financial reformers consider a critical part of the 2010 Dodd-Frank Wall Street reform act is set to finally go into effect. This measure was designed keep big banks from engaging in risky trading overseas that could contribute to another economic collapse at home—but Senate Democrats are sparring over whether it should be put into action.

The Dodd-Frank law, passed in order to avoid another financial crisis, requires Wall Street regulators to draw up tighter rules governing the trading of derivatives (financial products with values derived from from underlying variables, like crop prices or interest rates), and one question has been how these new standards will apply to US banks operating abroad. Advocates of financial reform contend these regulations must be strictly applied to the overseas trading activity of US banks. They note that Wall Street banks do more than half their derivatives dealing through foreign subsidiaries; if a bet in one of these foreign locations goes sour, the trading loss could come home to roost and threaten economic security in the United States. Foreign branches of US banks have so far been exempt from Dodd-Frank rules on derivatives, and Big Finance wants to keep it that way.

On Friday, the Commodity Futures Trading Commission's (CFTC) is due to be finalize a rule that will apply these strict regs on derivatives trading to overseas branches of US-based banks. But the agency's chief, Gary Gensler, is facing a crush of opposition from the financial industry and European banking regulators. And he's been getting conflicting messages from Senate Democrats. At the end of June, six Democratic senators—Chuck Schumer (D-NY), Kirsten Gillibrand (D-NY), Kay Hagan (D-NC), Michael Bennet (D-Co.), Heidi Heitkamp (D-ND), and Thomas Carper (D-Del.)—sent a letter to the Treasury Department urging that the CFTC delay finalizing the guidelines on overseas trading. Last week, another eight Senate Democrats, including Sens. Elizabeth Warren (D-Mass.), Barbara Boxer (D-Calif.), and Jeff Merkley (D-Ore.), sent a letter to the CFTC pushing for a rule on overseas derivatives trades that is even stronger than the one Gensler has floated, and urging him to implement it soon.

Schumer & Co. argue that the CFTC should first coordinate its overseas rules with similar regulations being proposed by the Securities and Exchange Commission (SEC) and by banking regulators abroad. They say they merely want to protect banks from being subjected to "duplicative" rules. The senators insist they are pushing for a delay only to help banks make an orderly transition to new rules.

http://www.motherjones.com/politics/2013/07/senate-democrats-cross-border-rule-cftc-schumer-warren


May want to call your Senator and make your feelings known on this one.

[liberal_at_heart]

1. I'm liking Merkley more and more and Warren just kicks butt.

Democrats should not be protecting the banks. They should be protecting us. Arrest some of those theiving bastards, and put the rules in place that make sure they can't do it again.

[xtraxritical]

2. You know, Elliot Spitzer was the only one that tried to prosecute

wall street fraudsters but the public was more concerned that he spent time with a hooker.

[liberal_at_heart]

4. I'd vote for Spitzer, but I'm not in New York.

[byeya]

5. That was the $$$ party and their stooges in the media doing a continuing smear job

on Spitzer.
I am hoping for a Spitzer comeback and would absolutely love to see him replace Shumer.

[liberal_at_heart]

9. we need to primary these blue dog dems that have been bought by the 1%.

[leftyohiolib]

8. the media made a big deal of that to overshadow his work against the banksters

[LuvNewcastle]

3. Even when the Senate has a Democratic majority, they still can't

accomplish anything because a significant number of them are bought and sold by Wall Street. That's why nothing ever changes unless the GOP is in power, and we all know what kind of change we get from them.

[byeya]

6. That, right now, is the sad-ass truth.

[liberal_at_heart]

7. you are absolutely correct. Almost all of them are bought by Wall Street.