By Zach Carter, AlterNet
Posted on June 11, 2010, Printed on June 14, 2010
http://www.alternet.org/story/147179/
For the Wall Street reform package currently making its way through Congress to work, it has to accomplish two broad goals: It must take a huge bite out of banking profits and end the too-big-to-fail oligopoly that encourages megabanks to take megarisks and stick taxpayers with the tab. Neither of these goals can be accomplished without taking on derivatives -- the wild, unregulated market that brought down AIG. Right now, the U.S. government pays big banks for operating derivatives casinos. If we're going to clean up the derivatives mess, we have to move taxpayer money out of the market.
"The dirty little secret here is that the American government has been subsidizing the derivatives market through the Fed and other avenues since its inception," says Adam White, director of research for White Knight Research and Trading. "That's crazy."
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