Excerpt
HARI SREENIVASAN (NewsHour): Let’s turn to a story about Wall Street and banks that’s angered many.
As one of its final acts last week, Congress passed a spending bill for 2015. Tucked into it was a provision to loosen banking regulations on hedges or bets known as derivatives or swaps. These are financial instruments that essentially allow banks to hedge bets on things that rise and fall in value, such as mortgages, currencies and interest rates.
After the financial crisis, the Dodd-Frank Act required big banks like J.P. Morgan to move some of those derivatives, or bets, to other banking units that don’t have a federal backstop or guarantee from the government.
The idea: No federal guarantee means no bailout. But the provision passed last week essentially cancels it and says banks don’t have to move those swaps around anymore.
Liberals were outraged. The most outspoken voice ahead of the Senate vote, Democrat Elizabeth Warren of Massachusetts.
SEN. ELIZABETH WARREN, (D) Massachusetts: Who do you work for, Wall Street or the American people? This fight isn’t about conservatives or liberals; it’s not about Democrats or Republicans. It’s about money, and it’s about power right here in Washington.
This legal change could trigger more taxpayer bailouts and could ultimately threaten our entire economy. But it will also make a lot of money for Wall Street banks.
HARI SREENIVASAN: But others, including Republicans and some Democrats, said that fear was overstated.
COMMENT: Boy, Los Vegas gamblers would love to have this out. Gamble all they want with their money, but have the American taxpayer cover any losses. Like I've said in the past, stock exchanges are the world's biggest gambling casinos.
No comments:
Post a Comment