Senator
United States Senate
Washington, DC 20510
Re: Pending Derivatives Amendments
Dear Senator:
We write on behalf of Americans for Financial Reform, an unprecedented coalition of over 250 national, state and local groups who have come together to reform the financial industry. Members of our coalition include consumer, civil rights, investor, retiree, community, labor, religious and business groups as well as Nobel Prize-winning economists. We support a strong Derivatives Regulation and oppose weakening amendments to the Restoring American Financial Stability Act, S. 3217.
It is now almost universally recognized that the fuse that lit the worldwide economic meltdown in the fall of 2008 was the $600 trillion, severely under-capitalized and unregulated and opaque swaps market, dominated by the world’s largest banks. The derivatives regulation amendments that Senators Lincoln and Dodd have incorporated into the “Restoring Financial Stability Act of 2010” will bring a critically important measure of regulation over dangerous derivates and swaps products by requiring: exchange-trading and clearing; prudential regulation; spinning off of swaps desks from systemically risky banks; and, the banning of swaps that cause financial instability.
Despite a multitude of carefully crafted requirements to ensure that these transactions are adequately capitalized and fully transparent, one single section of that bill has the potential to unravel the entire regulatory infrastructure. Amendment #4086 offered by Senator Cantwell would remedy the loophole in the current bill by ensuring that companies cannot knowingly evade the clearing requirements without sanction. We strongly urge your support for Cantwell Amendment 4086.
For more information, please contact Lisa Lindsley at 202-429-1275 or llindsley@afcsme.org
Sincerely,
Americans for Financial Reform