Wall Street Demands Derivatives Deregulation In Government Shutdown Bill

WASHINGTON — Wall Street lobbyists are trying to secure taxpayer backing for many derivatives trades as part of budget talks to avert a government shutdown.

According to multiple Democratic sources, banks are pushing hard to include the controversial provision in funding legislation that would keep the government operating after Dec. 11. Top negotiators in the House are taking the derivatives provision seriously, and may include it in the final bill, the sources said.

The bank perks are not a traditional budget item. They would allow financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts. Big Wall Street banks had typically traded derivatives from these FDIC-backed units, but the 2010 Dodd-Frank financial reform law required them to move many of the transactions to other subsidiaries that are not insured by taxpayers.

Taxpayer insurance helps banks secure higher credit ratings for their derivatives, since taxpayers assume some of the risk, which in turn makes the banks more profitable.

Read on.

3 responses to “Wall Street Demands Derivatives Deregulation In Government Shutdown Bill

  1. Reblogged this on Deadly Clear and commented:
    I’m sorry, but profanity is called for here – is Congress fucking nuts?

  2. It’s Tulip Bubble time. Are they fucking nuts? There is nothing in these derivatives!

    Aloha, Virginia Check-out http://www.deadlyclear.com

  3. They are not nuts. Congress is just bending over the banksters that brought and paid for the Congressional leaders. Time for people to cut the lovefest relationships with the Congress-banksters bedbuddies. And yes, there is nothing in derivatives which is why banksters don’t want derivatives regulated. If so, we would know how much real cash and assets that the banks are worth.

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