- Infowars - http://www.infowars.com -
New Derivatives Legislation “Was Probably Written by JPMorgan and Goldman Sachs”
November 16, 2009
William Greider has a great piece in The Nation pointing out:
Who drafted this dubious piece of legislation? Bankers (or their lawyers) did. The leading sellers of derivatives are an exclusive club of five very large financial institutions–Citigroup, JPMorgan Chase, Bank of America, Morgan Stanley and Goldman Sachs–that hold 95 percent of the derivatives exposure among the largest banks (the total contract value exceeds $290 trillion). These are the same folks who toppled the global economy and compelled government to intervene with gigantic bailouts.
Michael Greenberger, a University of Maryland law professor and veteran federal regulator, studied the House committee’s 187-page bill and detected the fine needlework of Wall Street lawyers. “It had to be written by someone inside the banks,” Greenberger said, “because buried every few pages is a tricky and devilish ‘exception.’ It would greatly surprise me if these poison pills originated from anyone on Capitol Hill or the Treasury.”
A well-informed Congressional source confirmed that the original language in the draft legislation was written by financial-industry experts. It “was probably written by JPMorgan and Goldman Sachs,” he told me, “and possibly the Chicago Mercantile Exchange.” The Chicago exchange trades commodity futures–hog bellies, beef, grains–and more exotic derivatives. It is a rival to Wall Street but very close to agribusiness interests like Cargill, the giant grain trader, that make heavy use of derivatives.
Washington insiders may not be shocked to learn that private-interest groups provided the draft bill. This is what lobbyists often do for the legislative process, especially on complex subjects like taxation and regulatory law. But the legislation was delivered to the House Financial Services Committee by Blue Dog Democrats, not lobbyists. There are fifteen Blue Dogs and like-minded members on the committee. Together they make up more than one-third of the committee’s Democratic majority (forty-two Democrats, twenty-nine Republicans).
“The conduit for the draft text was Blue Dogs and conservative Democrats,” my source explained…
The Blue Dogs claimed they were speaking for business, not bankers, but this too involved a little sleight of hand by industry lobbyists. Last summer, an official of the Securities Industry and Financial Markets Association told colleagues at a private industry meeting that since the bankers have damaged credibility in Washington, they should send their customers to push the bankers’ position on Capitol Hill. Sure enough, representatives from various industrial and agricultural sectors showed up to testify as expert witnesses and demand exemption from regulation as the “end users” of derivatives. Bankers told their clients that regulation would raise their costs. Never mind the costs to the country if derivatives blow up again…
The House Financial Services Committee is a prized assignment and known informally among members as a “money committee,” not because it deals with money issues but because its members have an easier time raising campaign funds from the banks and financial firms under their jurisdiction…
Money also explains why the committee is top-heavy with Blue Dogs. House Speaker Nancy Pelosi put them there, along with other freshmen and sophomores, knowing it can help them win re-election. She was encouraged by Representative Rahm Emanuel…
As recent election returns suggest, if the president continues to soft-sell reform, he is at risk of being identified with the old order in Wall Street. The longer Congress tries to placate the bankers with meek reforms, the sooner Democrats will discover this is really dumb politics.
Article printed from Infowars: http://www.infowars.com
URL to article: http://www.infowars.com/new-derivatives-legislation-was-probably-written-by-jpmorgan-and-goldman-sachs/
Copyright © 2013 Infowars. All rights reserved.