Articles tagged with: Wall Street lobbying
“The Wall Street Journal has reported that the big banks are pressing Congress for a statutory delay in the implementation of the Volcker Rule. They claim that the fact that the law will become effective this July, possibly before all the rules are finalized, will lead to disruptions in our financial markets. But that’s simply not true. …his lobbying effort should be see for what it is — just another effort to undermine and negate the Volcker Rule so that Wall Street can continue proprietary speculation while taking advantage of the safety net taxpayers provide to the banking system.”
Click here to view this week’s highlights and lowlights in Wall Street Reform – March 10, 2012 – March 16, 2012.
“But consumer advocates, watchdog groups and some economists are raising alarms. Taken together, the JOBS Act’s various provisions represent a dramatic rollback of financial regulations that date back to the Great Depression, they argue. It would reverse protections enacted with the Dodd-Frank financial reforms, some warn. ‘We’re all for channeling capital to small businesses,’ said Marcus Stanley, policy director of Americans for Financial Reform. ‘At the same time, we have banks for a reason, as opposed to people standing on the street corner taking shares in companies. So you’ve got to strike a balance.’”
The resignation of Goldman Sachs executive director Greg Smith and the striking op-ed he wrote in today’s NY Times reveal once again that the problems laid bare in the 2010 Congressional hearings on proprietary trading remain pervasive at our largest banks. Congress passed the Volcker Rule as a specific response to these issues. Indeed, the Volcker Rule – which reorients banking culture to serving customers by banning proprietary trading and the conflicts of interest it creates – is aimed at precisely the problems Mr. Smith describes at Goldman Sachs.
“It’s hard to believe that Democrats, who brought you the Dodd-Frank financial regulation act and the Consumer Financial Protection Bureau, are solidly backing a bill that would weaken or obliterate many regulations designed to safeguard investors. The bill, HR3606, sailed through the House Thursday with 222 Republicans and 168 Democrats voting for it. Only 23 members, all Democrats, voted against it. President Obama has endorsed the bill. The Senate is fast-tracking its own version, which could come to the floor Monday night. …AARP, Americans for Financial Reform, the North American Securities Administrators Association and the Council of Institutional Investors have strongly opposed all or some parts of the bill.”
“House Republicans, Senate Democrats and President Obama have found something they can all support: a terrible package of bills that would undo essential investor protections, reduce market transparency and distort the efficient allocation of capital. …Dozens of legal experts and advocates for investors and consumers have written to Senate leaders warning that extensive revisions must be made to the House legislation for it to be even minimally acceptable.”
“The Volcker rule, a crucial provision of the Dodd-Frank financial reform law, is supposed to stop banks from doing the sort of risky trading that was one of the big causes of the financial meltdown. The banks hate the rule because less speculation means less profit and lower bonuses for traders and bank executives. …Some advocates also warn that the regulations could still be read as allowing proprietary trading that is longer term in nature, including high-risk arbitrage trades that attempt to profit on price differences among similar assets.”
“The last time we saw this speculative feeding frenzy was in 2008, when in July, amidst the meltdown in the credit and housing markets, speculators wildly ran up the price of crude oil to over $140 per barrel. Was the steroidal price explosion in 2008 due to increased demand or a significant reduction in supply? Trading volume was nearly 15 times world oil demand that year, according to research compiled by Americans for Financial Reform.”