Because of the death of Sen. Robert Byrd (D-WV), prospects for passage of the conference report on Financial Regulatory Reform is now in a holding pattern. This conference report is expected to pass the House this week, but prospects for passage in the Senate are in doubt. President Obama has called on Congress to pass this bill by the July 4th recess next week. Conservatives worry that this bill establishes permanent bailout authority for failing businesses and that the regulatory provisions will hurt American competitiveness. The so called “Financial Services …
Majority Leader Harry Reid (D-NV) failed to end debate on Sen. Chris Dodd’s (D-CT) financial regulation bill yesterday when two Democrats broke ranks to vote with conservatives. The Dodd bill is already a big government monstrosity, expanding powers for existing Washington regulators as well as creating and empowering new ones. But frightened by the defeat of Sen. Arlen Specter (D-PA) and the near defeat of Sen. Blanche Lincoln (D-AR), Sens. Maria Cantwell (D-WA) and Russ Feingold (D-WI) issued statements following their “no” voted demanding that the bill further increase the …
Senate Democrats secretly agree that Sen. Blanche Lincoln’s (D-AR) proposal to attempt to impose a complete separating on credit default swaps and credit providers (i.e. banks) makes no sense. But they’re too embarrassed to say so while Lincoln uses the proposal to wage a populist campaign for re-nomination against liberal Arkansas Lt. Governor Bill Halter. Now that Lincoln has been forced into a June 8 run-off against Halter, Lincoln’s Senate colleagues are looking for a quiet way to kill her swaps proposal. Banking Committee Chair Chris Dodd (D-CT) first proposed, and …
As debate on the Wall Street “Reform” bill winds down in the Senate, Sen. Byron Dorgan (D-ND) is still pushing his ban on “naked” credit default swaps. We warned that the idea wouldn’t work. Now we have some real world experience with just such a proposal: Germany banned the practice in German financial markets Tuesday night, and stock prices fell in Germany and worldwide. Observers called the German ploy “an act of desperation and a refusal to address the fundamental problems at hand,” and warned that the move could cause …
Supporters of Sen. Chris Dodd’s financial regulation bill say it will end financial bailouts. In fact, the Senate — anxious to reassure Americans on that fact — even added an amendment last week with a stated purpose “[t]o prohibit taxpayers from ever having to bail out the financial sector.” But someone forgot to tell the folks across town at Freddie Mac and Fannie Mae. Freddie last week announced it had lost $8 billion in the first quarter of the year, and would be asking for another $10.6 in taxpayer help. …
As the Senate moves closer to another cloture vote on Senator Dodd’s legislation, we are again reminded of the several flaws found in the Dodd-Frank approach to financial regulatory reform. Beginning with the rescue of investment bank Bear Stearns in the spring of 2008, the Federal government has committed trillions of taxpayer dollars to institutions like Fannie Mae, Freddie Mac, AIG, Citigroup and Bank of America, out of fear that the demise of any of these “too big to fail” institutions would trigger a systemic crisis and collapse of the …
It makes a future market melt-down more likely. Today the Senate takes up Senator Blanche Lincoln’s amendment to regulate over-the-counter derivatives. The Lincoln bill is very, very bad, but don’t take out word for it, ask the Federal Reserve. Fed Staffers released a four page, seven point critique saying the Lincoln bill would “impair financial stability and strong prudential regulation of derivatives; would have serious consequences for the competitiveness of US financial institutions; and would be highly disruptive and costly, both for banks and their customers.” The first point of …
The latest word today is that the GOP is standing down from its standoff over the Senate’s financial-regulation bill. Specifically, word is that Republican leaders will now let the bill proceed to the floor, having received assurances that provisions for creditor bailouts will be removed. That’s not an insignificant improvement, despite the fact that President Obama has said that it is not “legitimate” to raise the issue of bailouts. But no one should think this bill is fixed. Far from it: Beyond the creditor bailout, I’ve counted at least 13 …
Somebody spilled the beans Tuesday, telling the truth about the financial reform bill being debated in Congress. But most media ignored it. Rather than being the targets of this bill, Wall Street financiers will be rewarded by it. The chairman of Goldman Sachs, Lloyd Blankfein, told a Senate subcommittee, “The biggest beneficiary of reform is Wall Street itself.” So why does President Obama instead want us to believe the legislation is our revenge against Wall Street, a chance to get our money back after so many bailouts?
The Dodd financial reform bill is beginning to scare executives. However, it is not necessarily scaring bankers or Wall Street fat cats. It is scaring motor cycle manufacturers, college presidents, retailers, car dealers, and even coffee shop executives. All of these people and more are waking up to the Dodd bill’s threat to their businesses. If you read the Dodd financial reform bill carefully, the words “bank” or “financial” could refer to many more people than just bankers. Those words apply to any provider of “financial products” even if the …
