Get those conspiracy caps on already!
Here, courtesy of the FT’s Tom Braithwaite, is the four-page document that has helped block financial reform legislation in the Senate. For now.
Dated April 24, these are unsigned “comments” on the Senate Agriculture Committee’s OTC Derivatives Bill – the anti-swap legislation that was largely folded into the slightly less-aggressive Dodd bill on Monday. Click to read.
This document is what caused Ben Nelson, the Democratic senator from Nebraska, to join 39 Republicans in opposing a procedural motion late on Monday that would have opened up the financial reform bill for debate in the Senate. It was made public by Judd Gregg, a Republican senator from New Hampshire, who noted that, as currently framed, the legislation 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.
There’s going to be a serious backlash here – and not just against Senator Nelson.
The text is attributed to “Fed staffers” – not the official view of the Federal Reserve, but highly damaging nonetheless. It details seven areas where derivatives-related reform needs a comprehensive re-draft — a re-draft that might have the handy side-effect of helping Wall St banks avoid having to spin off their derivatives operations.
What a fun way to run a democracy!
Related links:
Republicans delay financial reform bill – FT
Derivatives reform: Swap-ocalypse Now – FT Alphaville
Dear Wall Street: join me, or else – FT Alphaville
The Dodd bill has an is-ought problem – FT Alphaville