Wednesday, November 25, 2009

Some Real Financial Reform Gaining Momentum?

Noam Scheiber at The New Republic writes
Something strange and a little disorienting is happening in the fight to reform Wall Street: It looks like the reformers are actually starting to win.

If you want to learn more about derivatives and how they work, read the article. 
Barney Frank just weeks ago, was having to weaken a reform bill tightening the loopholes in the derivatives market because of light political support.  Enter Obama appointed Chairman Gary Gensler of the Commodity Futures Trading Commission who added support for making Franks "weakened reform bill", stronger.  He pointed out that polls show Americans are on the side for strong reform and producing a lesser bill to accomodate a broader range of Congressmen's votes could have consequences at the polls in selected districts.
Scheiber states there is agreement that when the bill comes to the floor of the House in mid-December, a strong version will pass.  So now, you think we have a win.  Got something done in Congress.  But wait, Don't forget the Senate:
"As with most legislation, the real fight now appears to be in the Senate. Throughout much of the summer and fall, the banks approached the House as though they were playing with, well, house money: A big exemption would almost certainly survive the Senate, but a tough bill could be softened up there. That logic may still apply. But the Senate calculus has recently been scrambled. Two weeks ago, Senate Banking Committee chairman Chris Dodd unveiled his own regulatory proposal, including a derivatives measure tougher than anything the House has discussed. Even Dodd himself doesn’t expect it to pass whole cloth. “He’s put his ideal bill out there,” says a Banking Committee staffer. But, if nothing else, it shifts the debate’s center of gravity further to the left and makes a tough reform package more likely."
Here's hoping we win one for the good guys (us) this time, over wall street greed.

1 comment:

  1. It sounds like a broken record, but I agree again. The number one thing this administration could do, well, one of the number one things, is to correct the mistakes that allowed the financial institutions to put us into the place where we were last year. Again, it's almost a moral thing for the leader that comes after all this mess, makes it one of his biggest priorities to get it fixed. He really doesn't deserve to get re-elected if he doesn't even try. Of course, keeping in mind that Congress writes the bills! Thanks.
    By the way, I too, am just trying to get my head around this whole financial mess. It's tough reading. I still like to read Bruce Barlett's Capital Gains blog as a good source to start.

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