Uh Oh... 'Wall Street Deregulation Advances As Top Democrat Warns That Vote Could 'Haunt' Congress' [View all]

[WillyT]

Wall Street Deregulation Advances As Top Democrat Warns That Vote Could 'Haunt' Congress
Zach Carter - HuffPo
Posted: 03/20/2013 2:34 pm EDT

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WASHINGTON -- A House Committee approved six new bills to deregulate Wall Street derivatives on Wednesday, advancing legislation that would expand taxpayer support for derivatives and create broad new trading loopholes allowing banks to shirk risk management standards created by the 2010 Dodd-Frank bill.

The House Agriculture Committee passed all six bills with broad bipartisan support, just five days after Sen. Carl Levin (D-Mich.) released a report detailing extensive failures to contain derivatives risks at JPMorgan Chase -- troubles that lead to billions of dollars in losses from a single trade.

The legislation will next be considered by the full House of Representatives.

The most controversial bill to advance Wednesday is explicitly designed to expand taxpayer backing for derivatives. It was the only legislation that lawmakers were required to cast individual votes for or against; the others were all approved by unanimous voice votes. The bill to increase taxpayer support for bank derivatives dealing was approved by a vote of 31 to 14.

Prior to the vote, the top Democrat on the Agricultural Committee, Rep. Collin Peterson (D-Minn.), gave a speech warning that the legislation could repeat the deregulation debacles of the 1990s.

"Two of the worst votes I ever made in this place was the Commodity [Futures] Modernization Act of 2000 that exempted all of these swaps from any regulation or any margins," Peterson said. "I didn't know any better. The other vote I made that was really bad is eliminating Glass-Steagall. We should have never done that and I bought into that. You know, if we had Glass-Steagall back, this wouldn't be an issue here ... You're putting taxpayers on the hook. And if you wanna do that, fine. But I mean, you know, when I, when a lot of us were here, we hadn't paid enough attention and this thing blew up on us. At the time we did the Modernization Act, there were $80 billion in swaps, in derivatives. We gave 'em legal certainty, we eliminated the regulation requirements, and it went to $700 trillion and it blew up on us. So just be careful: You can vote any way you want, but this could come back and haunt you."

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More: http://www.huffingtonpost.com/2013/03/20/wall-street-deregulation-_n_2916795.html