““We had been warning for years about this loophole in the CFTC’s cross-border guidance,” Marcus Stanley, policy director for American for Financial Reform, told Bloomberg’s Silla Brush. “Now the CFTC seems to be letting it become an exit-ramp from Dodd-Frank.”
“Overall, this rule is disappointing. It continues to leave a major gap in regulatory authority regarding the application of U.S. law to foreign subsidiaries of U.S. banks. Specifically, while the rule applies U.S. jurisdiction to cases where a foreign subsidiary’s swap counterparty has legal recourse to the U.S. parent bank for the performance of a specific swap, it does not extend jurisdiction to cases where the parent U.S. bank is implicitly or even explicitly committed to guarantee the subsidiary in general.”
“The bill includes… measures sought by the largest Wall Street banks and the Koch brothers, who control significant financial and energy derivatives operations,” writes Zach Carter of the Huffington Post. “Americans for Financial Reform, the premier policy analysis organization among bank watchdogs, advocated strongly against the bill alongside consumer groups and the AFL-CIO.”
“The Commodity Futures Trading Commission (CFTC) has a huge role to play in protecting consumers and the economy against fraud, price manipulation, and reckless speculation… Unfortunately, HR 4413 would seriously interfere with the agency’s ability to fulfill its mission and defend our economic security.”
“There is still ‘great risk of going back even on the commitments that have been made final,’ said Marcus Stanley, policy director at Americans for Financial Reform… ‘In no way is he just a caretaker for a job that’s just been completed by somebody else,” Stanley, referring to Massad, said in an interview. ‘To make derivatives reform a reality means taking on some powerful interests and pushing forward against significant opposition and we hope he’s up to it.’”
“’You could potentially use this to unravel big chunks of Dodd-Frank,’ said Marcus Stanley, policy director for Americans for Financial Reform, a coalition that includes the AFL-CIO labor union. The CFTC should institute a default presumption that affiliates are guaranteed by their parent company unless a bank can prove otherwise, he said.”
AFR sent a letter to members of Congress, urging them to oppose HR 4167. If enacted, this legislation would advance the interests of a few Wall Street mega-banks in weakening implementation of the Volcker Rule ban on proprietary trading.
“’There are provisions in this bill that would effectively unwind a good deal of the work the CFTC has already done and make it much harder for them to regulate the derivatives markets,’ Marcus Stanley, policy director for Americans for Financial Reform, a coalition including the AFL-CIO labor federation, said in a phone interview.”
Nineteen members of Congress, led by Barney Frank, a lead author of the Dodd-Frank Act, filed the amicus brief linked below speaking out against the efforts of major Wall Street derivatives dealers to overturn key Dodd-Frank derivatives rules. The brief was drafted by former Just
While the Administration wants to increase the CFTC’s budget, its $280 million request for FY 2015 is $35 million less than last year’s proposal, The American Banker points out. “We have the mandate, but not the money, to do the job,” Commissioner Bart Chilton said in a press release. Americans for Financial Reform, the story adds, has described underfunding of the CFTC as “a backdoor attack on derivatives regulation.”