CMOC: Wall Street Dupes Big Business Into Fighting Against Reform
For immediate release Contact: Simone Allen (404) 692-5102
May, 11, 2010
Wall Street Dupes Big Business Into Fighting Against Reform
End User Coalition Calls on Procter & Gamble, Caterpillar, Apple and Others to Leave Sham Coalition
As the U.S. Senate debates measures to hold Wall Street accountable for the financial crisis, Commodities Market Oversight Committee (CMOC) supported a letter that hedge-fund manager Michael Masters has written to some of the nation’s biggest businesses asking them explain why they are siding with the biggest banks – and against their own interests – on derivatives reform.
“Today, there is no legitimate reason that non-financial businesses should be lobbying to weaken legislation that would prevent the next AIG collapse and taxpayer bailout,” said hedge fund manager Michael Masters. “The only explanation is that these companies are being duped by the big banks, who are desperate to escape accountability for the reckless gambling that crashed the economy and know they are not politically popular these days. It’s time for these companies to wake up to the fact they are being used. These blue chip companies owe it to their shareholders, their customers and every American to stand up for real reform that regulates the dangerously opaque and unregulated $600 trillion derivatives market.”
These businesses and others are members of the Coalition for Derivatives Ends Users, which was launched to argue that legitimate hedging by businesses like airlines and manufacturers to manage risk in fluctuating markets for commodities like oil, should not be subject to the same rules as the kinds of wild, speculative bets that led to the financial crisis, bringing down companies like Lehman Brothers and AIG.
Those legitimate hedging activities were exempted in both the House-passed financial reform bill and the legislation currently being debated in the U.S. Senate. But this sham coalition has continued to fight for reduced capital requirements for swaps dealers, loopholes that would exempt hedge funds, insurance companies and other financial players from the clearing, trading and margin requirements, and the stripping of “too big to fail” provisions that prevent taxpayers from bailing out swap dealers. If the Senate falls for this and enacts all these loopholes it will eviscerate the reform bill and virtually guarantee that we experience another financial crisis within ten years.
###CMOC, Derivatives, Senate, senate derivatives