Sure, American politicians have been bought and paid for by the Wall Street giants. See this, this and this.
And everyone knows that the White House and Congress – while talking about cracking down on Wall Street with strict regulation – have actually watered down some of the most important protections that were in place.
For example, Senator Cantwell says that the new derivatives legislation is weaker than the old regulation. And leading credit default swap expert Satyajit Das says that the new credit default swap regulations not only won’t help stabilize the economy, they might actually help to destabilize it.
But the U.S. is not being sold out in a vacuum.
On March 1, 1999, countries accounting for more than 90 per cent of the global financial services market signed onto the World Trade Organization’s Financial Services Agreement (FSA). By signing the FSA, they committed to deregulate their financial markets.
For example, by signing the FSA, the U.S. agreed not to break up too big to fails. The U.S. also promised to repeal Glass-Steagall, and did so 8 months after signing the FSA.
Indeed, in signing the FSA and other WTO agreements, the U.S. has legally bound itself as follows:
• No new regulation: The United States agreed to a “standstill provision” that requires that we not create new regulations (or reverse liberalization) for the list of financial services bound to comply with WTO rules. Given that the United States has made broad WTO financial services commitments – and thus is forbidden by this provision from imposing new regulations in these many areas – this provision seriously limits the policy available to address the current crisis.
• Removal of regulation: The United States even agreed to try to even eliminate domestic financial service regulatory policies that meet GATS rules, but that may still “adversely affect the ability of financial service suppliers of any other (WTO) Member to operate, compete, or enter” the market.
• No bans on new financial service “products”: The United States is also bound to ensure that foreign financial service suppliers are permitted “to offer in its territory any new financial service,” a direct conflict with the various proposals to limit various risky investment instruments, such as certain types of derivatives.
• Certain forms of regulation banned outright: The United States agreed that it would not set limits on the size, corporate form or other characteristics of foreign firms in the broad array of financial services it signed up to WTO strictures …
• Treating foreign and domestic firms alike is not sufficient: The GATS market-access limits on U.S. domestic regulation apply in absolute terms; that is to say, even if a policy applies to domestic and foreign firms alike, if it goes beyond what WTO rules permit, it is forbidden. And, forms of regulation not outright banned by the market-access requirements must not inadvertently “modify the conditions of competition in favor of services or service suppliers” of the United States, even if they apply identically to foreign and domestic firms.
In other words, the problem isn’t just that Congress and the White House have sold out to the Wall Street giants.
The problem is also that the U.S. has signed WTO agreements that have given the keys to the too big to fails, and have neutered their regulators. Even if some politicians tried to stand up to Wall Street – or even if we “throw out all of the bums” currently in political roles – the U.S. would still be locked into the WTO’s scheme for helping the financial giants to grow ever bigger and to take ever-bigger and ever-riskier gambles.
Indeed, the financial giants are pushing hard for further deregulation, demanding that the WTO’s “Doha round” of agreements be signed.
http://www.nakedcapitalism.com/2010/02/guest-post-the-o...Every proposed bill which even pretends to regulate banksters is all for show. All this reform they keep talking about is just the politicians posturing for the cameras. Every reform which sounds like it will do some good will be a bill which always will be just proposed. Proposed but never ever passed into law.
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
