Community | October 26, 2009 | 30 comments

Financial oversight board offers loopholes to Wall Street banks

source: http://www.progressive.org/wx102309.html

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WakeUpPeople
I was reading the business pages of the New York Times today, and I caught an article at the bottom of Page B3 entitled “Vote Backs a Financial Oversight Body.”

And I thought, great, finally, we’re going to get some much-needed regulation of the banks.

But then I read the fine print.

And it turns out there’s less here than meets the eye.

And that’s because, as the article noted, “a group of Democrats [in the House] with close ties to the banking industry” succeeded in diluting the bill in Barney Frank’s Financial Services Committee.

Originally, the bill would have granted wide authority to the states to regulate banks more vigorously than the federal government has been doing.

But the Democrats in the back pocket of the banks, along with Republicans in the front pocket, didn’t want those pesky states to be able to tell the banks what to do.

So they tried to outlaw entirely the rights of states to impose stiffer regulations.

The House ultimately compromised by allowing the Comptroller of the Currency to override the state regs if they are “significantly” at odds with the federal regs.

Well, what does “significantly” mean?

And why should the Executive Branch be the one to decide this issue?

We’ve seen the catastrophic results that ensue when the Executive Branch is the final word on bank regulation.

Michael Hirsh of Newsweek points out another warping of the bill by the House Democrats. Turns out that Wall Street will still be able to trade some derivatives in the dark.

“Thanks to weeks of intense pressure from Wall Street banks and their customers in corporate America, the bill that was approved on Thursday by Rep. Barney Frank's Financial Services Committee is riddled with exceptions and loopholes, many critics say,” Hirsh wrote. “If it becomes law, Wall Street's finest could be driving truckloads of new derivatives products through those loopholes for years to come.”

So, after Wall Street destroyed the U.S. economy by gambling on derivatives, the Democrats in Congress still are failing to muster the necessary backbone to thoroughly regulate them.

What Sen. Durbin said of Congress a few months ago is still true today: “The banks own this place.”
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30 comments // Financial oversight board offers loopholes to Wall Street banks

  • WhiteNoise
  • jubal
    • 0
      jubal  

    • Public financing is not going to work unless you can put a stop to the free speech rights of artificial people; corporations.

    • 2 years ago
  • J_Jammer
  • RFIDemocracy
    • 0
      RFIDemocracy  

    • Publicly-funded elections.
      Wrest control of the public's destiny from the hands of the corporate raiders by cutting them out of the process.
      Everyone pays a portion of the cost, all candidates get an equal portion to spend on their campaigns. No more corporate 'donations'.
      End the bribery.

    • 2 years ago
  • WhiteNoise
    • 0
      WhiteNoise  

    • The Obama administration, rather than chart a new course, is intent on re-inflating the bubble. The trillions of dollars of government funds being spent to sustain these corrupt corporations could have renovated our economy.

      We could have saved tens of millions of Americans from poverty. The government could have, as consumer activist Ralph Nader has pointed out, started 10 new banks with $35 billion each and a 10-to-1 leverage to open credit markets.

      Vast, unimaginable sums are being placed into these dirty corporate hands without oversight. And they will use this money as they always have—to enrich themselves at our expense.

      Resist or Become Serfs
      http://www.truthdig.com/report/item/20090406_resist_or_become_serfs/

    • 2 years ago
  • galwayman
    • 0
      galwayman  

    • SAY WHAT? to give loopholes to these scumbags any loopholes is criminal! these scumbags have robbed this country with their greed! well we can't expect for the puppets to screw their masters! This rich elite run this country and tell their puppets what to do and they do it! No matter that it all harms us the people! These scum pay almost no taxes on their ill gotten gains! Loopholes,too many,are already there for these scumbags! don't give them more rather take also the ones that already exist!

    • 2 years ago
  • jubal
    • 0
      jubal  

    • We need instutional overhauls in this country, what is going to be the catalyst that will cause people to rise up? And when they do, they are already prepared with their special forces to smash us down and arrest us as terrorists for simply exercising our constitutional rights.

      Its because of this mess and the apparent lack of solutions that I dream of asteroids, tsunamis, earthquakes, violent weather, and ET invaders taking down the whole house of cards. It's like it would be a blessing.

    • 2 years ago
  • WhiteNoise
  • Saladin
    • 0
      Saladin  

    • Remember stuff like this, and remember what to call it.

      Aristocracy.

      We are creating a nobility in this country, a financial caste system.

      This is aristocracy, corporations have hijacked our republic and industrial capitalism to create an economic feudalism.

      They don't call it "dead peasant" insurance just to be cute. You ARE a fucking peasant. And these people are the noble lords.

      Say it loud, and don't let anyone call you a radical when you say it, because it's the goddamn truth.

    • 2 years ago
  • wayseeker
  • cztheday
    • 0
      cztheday  

    • Very early in my career, I was trying to figure out who was really at fault in a complicated business case. One of my mentors at the time advised me to "follow the money." Being 23 years old and therefore knowing everything there was to know in the world, I told him that sounded like a cliche. He just smiled at me and said, "Maybe so. But it works."

      So I tracked all of the payments that were made in the course of the matter -- and sure enough the perpetrator was at the end of a lot of really big checks.

      The failure of the investment vehicles that precipitated so much of the cratering of our economy made some people a LOT of money. If a guy is sitting on $250 million that he gained from the sale of questionable derivatives, why not toss another $10 million at seeing if he can keep that gravy train on the tracks.

      The same is true of our incredibly disfunctional health insurance "system." If you can bilk hundreds of millions of dollars out of people by shaking them down for exhorbitant premiums in an uncompetitive marketplace...and then deny them insurance if they contract a serious illness so that you don't have to pay out any of your ill-gotten gains, why not toss a few million at lobbyists to see if you can keep THAT gravy train on the tracks.

      Don't even get me STARTED on the energy industry...

    • 2 years ago
  • neocongo
  • Amber_Taylor
    • 0
      Amber_Taylor  

    • I would like to know more details and see the bill. If states have the right to create their own regs, then you will have 50 loopholes instead of one. This should be done by the Feds since it affects all of the country. It's a lot easier to fix and regulate one problem than 50 different ones.

    • 2 years ago
  • Maeveeo
  • dv627univ
  • Progresshiv
    • 0
      Progresshiv  

    • "It's a Wonderful Life," the sequel, 2009: The residents of Potterville (formerly Bedford Falls) sleep in the streets as George Bailey's bloated corpse bobs up and down against a piling in the river. Mr. Potter has Mary Bailey perform unspeakable acts upon him as he lounges in his new, electric wheelchair, and Zuzu works the red light district to save up enough cash for a fix.

      Corporate Fascism: the New Bipartisan Deal!

    • 2 years ago
  • tangibleparadox
  • J_Jammer
  • rickm8
    • 0
      rickm8  
    • J_Jammer:

      Just wait, the revolution shall begin. Ill happily lead the march to take the capitol building down wall by wall.

      I actually plan on going to DC to piss on the steps of the capitol building sometime soon and cut a flag into pieces.

      This is all because were going down the shitter. maybe people will enjoy a wake up call.

    • 2 years ago
  • J_Jammer
    • 0
      J_Jammer [removed]  
    • J_Jammer:

      I believe in respectfully dissenting--not into disrespecting. The flag didn't do anything and the steps didn't do anything. Someone spent their time making the flag (when it was first created and then altered and such) and even though that's not the original flag it's still a symbol of that person's hard work. As for the steps someone designed and then built those steps to represent something that may not be represented today---but they had no part in who is housed there but what the building was to represent.

      It's not fair to attack those things to get at people that deserve to be "attacked" for their wrongful thoughts and actions.

      There is always a better way.

    • 2 years ago
  • tangibleparadox
  • wayseeker
  • J_Jammer
  • hunzedog
  • Stradius
    • 0
      Stradius  

    • These articles are too vague. I want NAMES, any elected official that plays around with our representation needs to be booted right out on his ass.

      I need a list for my next witch hunt.

      Thanks!
      Strad

    • 2 years ago
  • WhiteNoise
  • jubal
  • WhiteNoise
  • WhiteNoise
    • 0
      WhiteNoise  

    • PRIMAL INFO
      http://www.democracynow.org/2009/10/15/black

      WILLIAM BLACK: Well, the earliest effort is—should be a real wake-up call, because it’s horrible. Barney Frank has proposed legislation on financial derivatives that essentially exempts what are called over-the-counter derivatives from most regulation, and it is over-the-counter derivatives that have been a major cause of this crisis. So that’s utterly insane. There’s no conceivable justification for it. And he stacked the hearing. There were nine witnesses; eight of them were from the industry and, of course, testified that they were vital to the world. The ninth witness was the only person who was in the least bit skeptical, and he was promptly gaveled down, unlike the others, by the chair. So it’s not only a farce; they’re willing to have us see that it’s a farce. They are so little afraid of public opinion and outrage that they’re not even taking steps to cover up the cover-up.

      AMY GOODMAN: Bill Black, how much does the 2010 elections coming up have to do with what’s happening now—I mean, from preserving the health insurance industry to preserving the financial elite in this country and the money that goes into the—back into politicians’ pockets, into their coffers?

      WILLIAM BLACK: Well, it has a lot to do, in particular, with the Blue Dogs. The Blue Dogs are the more conservative Democrats, and they are racking up unprecedented political contributions, because, of course, they’re such a powerful voting bloc. Even though they’re not all that large in number, they can be decisive in whether anything gets through the Senate, in particular, but they can also be real obstructionists in the House. And by being obstructionist, they make themselves very attractive to the lobbyists. And a number of the Blue Dogs are in jurisdictions where, you know, they have to worry about reelection, and so they think maximizing political contributions is the best possible thing they can do. And the result is very perverse, in terms of our ability to get any reforms.

      AMY GOODMAN: William Black, I want to thank you very much for being with us, former bank regulator at the Federal Savings and Loan Insurance Corporation. His book is called The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry.

    • 2 years ago
  • jubal
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