Comments on: Guest Post: Bank Lobbyists Are Not Only Trying to Kill NEW Legislation, They Are Trying to Weaken EXISTING Regulations

By: Hugh

Hugh — Thu, 15 Oct 2009 17:25:27 +0000

I see no reason why lobbyists would not seek to gut the CFPA. The Obama Administration has already caved completely on any meaningful regulatory reform. The CFPA was at best a medium sized reform. By itself it didn’t even begin to correct the fundamental problems we face. But remember Frank had already stripped it of its power to require financial institutions to offer “plain vanilla” alternatives to instruments, like mortgages. Bean’s action was just the next logical step in eviscerating the CFPA.

The bottomline remained unchanged throughout, with or without an intact CFPA. Real financial reform was never on the table. From an industry point of view, doing in the CFPA was not an existential battle but a minor bit of housecleaning.

By: DownSouth

DownSouth — Thu, 15 Oct 2009 16:43:36 +0000

Just imagine! A female Democrat, a gay Democrat and a black Democrat are doing this to me.

My partisan meter doesn’t seem to be working, but the needle on my identity politics meter has completely flown off the dial.

By: DownSouth

DownSouth — Thu, 15 Oct 2009 16:31:42 +0000

Another telling bit of information from the NY Times story linked above: The political obstacles to the creation of a consumer protection agency are formidable. In the last decade, banking and other interests that now oppose the agency’s creation contributed more than $77 million to the members of the House Financial Services Committee, according to the Center for Responsive Politics, a nonpartisan research organization that studies the influence of money on policy. Two of the largest recipients of money from the financial sector over the period have been Mr. Frank, whose campaigns have received more than $3 million...

By: DownSouth

DownSouth — Thu, 15 Oct 2009 16:20:57 +0000

It looks like the Obama administration has jumped on the band wagon to gut any substantive regulation of deriviatives:

The House Financial Services Committee, for instance, approved a provision on Wednesday that Mr. Frank said would exempt “the great majority” of businesses that use derivative instruments to hedge their business risks from trading such instruments through exchanges or clearinghouses. Senior officials at the Commodity Futures Trading Commission and the Securities and Exchange Commission have been critical of the exemptions, saying they would create too large a loophole for financial instruments that were unregulated and played a central role in the economic crisis.

On Wednesday, the administration announced its support for the exemptions. Mr. Barr, the assistant Treasury secretary, said in a telephone briefing with reporters that, while the administration did not propose the exemptions, they were “reasonable ones” that would still permit aggressive oversight because the legislation would impose supervision on the dealers of derivatives instruments.

http://www.nytimes.com/2009/10/16/business/16regulate.html?hp

By: Thursday Midmorning Call « The Confluence

Thursday Midmorning Call « The Confluence — Thu, 15 Oct 2009 14:27:20 +0000

[...] George Washington of Washington’s blog guest posts at Naked Capitalism today with an analysis that says the bankers are trying not only to tank any new regulations coming down the pipe, they’re trying to remove old regulations too. Everyone knows that the lobbyists for the financial giants are trying to kill any tough new regulations. [...]

By: eh

eh — Thu, 15 Oct 2009 08:46:41 +0000

It’s only logical, people normally behave logically, i.e. in their own interest. Now that the ‘too big to fail’ meme is the accepted wisdom, why shouldn’t they seek to maximize their opportunities? What has happened, and what is going on now, is not the fault of the banks, but those at Treasury and the Fed who have accepted ‘too big to fail’, and done things to make sure that’s the case — that they don’t fail. I don’t recall hearing any serious caveats to that — even extravagant bonuses at institutions that have gotten debt-financed taxpayer funds have not been seriously challenged. Not really.

Not to mention the politicians who have dutifully passed all the ‘necessary’ legislation.

By: Richard Kline

Richard Kline — Thu, 15 Oct 2009 07:35:39 +0000

Never let a crisis go to waste! And when a cabal has the government in it’s wallet pocket, whey _not_ gut existing legislation?

By: George Washington

George Washington — Thu, 15 Oct 2009 05:28:41 +0000

My apologies! I posted this before reading Yves’ post.

I apologize for the duplication.