Whose Side Are They On?

[dtotire]

Editorial




Published: April 17, 2010

Last month Democrats on the Senate banking committee passed a reasonably tough financial regulatory reform bill. Now Republican leaders have suddenly begun lashing out against it.

Did they belatedly discover some problem? No. They suddenly realized that their bet that reform would be watered down as it moved along might not pan out.

Their battle cry of “no more bailouts” is disingenuous. They are not worried that reform will make bankers’ lives too easy, they are worried that it will make them too hard.

The Republicans started loudly objecting only after Senator Blanche Lincoln, an Arkansas Democrat who is chairwoman of the agriculture committee, took an unexpectedly strong stand in favor of reining in financial derivatives, the complex and largely unregulated instruments that were at the heart of the financial crisis. (Her committee has jurisdiction, because derivatives have long been used to trade commodities.)

The agriculture committee’s bill will be folded into the banking committee’s larger legislation, which includes other important reforms like consumer protection and the systemwide regulation of risk.

Of all the regulatory changes under consideration, the outcome of derivatives reform is arguably the single most important issue for the banks. Why? Because derivatives are where the money is.

An overarching aim of reform must be to ensure that all derivatives deals — many of which currently trade as one-on-one private contracts — are moved onto transparent, fully regulated exchanges. If that happens, banks stand to lose potentially billions of dollars in earnings. In addition to reducing systemwide risk, transparent trading would lead to more competitive pricing.

more:
http://www.nytimes.com/2010/04/18/opinion/18sun1.html?ref=opinion

[Daveparts still]

1. Typical

of the New York Times, A. or B.? "reasonably tough financial regulatory reform bill." Not a very though bill but a reasonable bill and considering that Wall Street is in New York what would be considered reasonable to the home town fans? Weak, and Republicans are against it? Well then whose side are they on? They're on the side of big business just same as the New York Times.

They frame the issue as A. or B. and then judge the issue on the negative sides of B. rather than the actual value of A.