http://www.truthdig.com/eartotheground/item/larry_summers_and_the_end-game_memo_20130825/
The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.
Second, the banks wanted the right to play a new high-risk game: “derivatives trading.” JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its books as “assets.”
But their work wouldn’t end there. Prudent financial controllers who wanted to protect their wealth rather than just get rich could simply move their investments to countries with safer banking laws. That would have to be changed. So the leaders of Goldman Sachs, Merrill Lynch, Bank of America, Citibank and Chase Manhattan sought to “eliminate controls on banks in every nation on the planet — in one single move.”
To do this, Palast writes, they used “the Financial Services Agreement, an abstruse and benign addendum to the international trade agreements policed by the World Trade Organization.”
“Until the bankers began their play,” Palast continues, “the WTO agreements dealt simply with trade in goods—that is, my cars for your bananas. The new rules ginned-up by Summers and the banks would force all nations to accept trade in ‘bads’—toxic assets like financial derivatives.”
“Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives ‘products.’ ”
“And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.”
The banks then strong-armed the member nations into abandoning their previous trade-in-goods deals by threatening to block international sales of the nations’ key exports. Every single bullied nation signed.
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