Wednesday, June 30, 2010

Derivatives Reform Suffers Midnight Mangling

The last day was a long one in the House-Senate conference committee on financial reform. The conferees had been at it since 9:00 a.m. and were rumpled and weary. Big bank lobbyists packed the conference room and trailed out into the hallways. As the clocked ticked into the wee hours, the chances for meaningful financial reform dimmed. At issue was the strong and controversial crack-down on derivatives trading authored by Senate Agriculture Committee Chair Blanche Lincoln (D-Arkansas).

Taxpayers Still Back Reckless Wall Street Trading

At about midnight, House Agriculture Chairman U.S. Representative Collin Peterson (D-Minnesota) offered an amendment to the Lincoln provision to require big banks to spin off (or push out) their derivatives desks into a separately capitalized affiliate. The Lincoln measure was geared toward ending taxpayer supports (FDIC insurance, Federal Reserve monies) for Wall Street gambling.

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