DC Message Boards: The Wall Street Transparency & Accountability Act of 2010 - DC Message Boards

Let's start reviewing the language of the bill.

Bill Summary

This is landmark reform legislation that will bring 100 percent transparency to an unregulated $600 trillion market, close all loopholes and keep jobs on Main Street. This will protect taxpayers, jobs, consumers and the global economy, and will go further than any other proposal to prevent future bailouts.

Historic Reform of the Derivatives Market

Brings 100 Percent Transparency to Market with Real-Time Price Reporting:

Wall Street will no longer be able to make excessive profits by operating in the dark. Exposing these markets to the light of day will put this money where it belongs – on Main Street. The public will see what is being traded, who is doing the trading and, most importantly, regulators can go after fraud, manipulation and excessive speculation.

Lowers Systemic Risk by Requiring Mandatory Trading and Clearing:

Trading and clearing of swaps lower risks and make the entire financial system safer. Transactions, determined by the regulator, will be required to clear through a clearinghouse. In addition, these transactions must be traded on a regulated exchange, which will provide further market transparency.

Prevents Future Bailouts and Address "Too Big to Fail":

Banks need to be kept in the business of banking. The taxpayer funds used to bail out AIG and other Wall Street firms will never be used for this purpose again. The Federal Reserve and FDIC will be prohibited from providing any federal funds to bail out Wall Street firms who engage in risky derivative deals.

Closes Loopholes:

Loopholes have allowed far too many to avoid the law of the land or set up shell companies to claim exemptions. This bill gives regulators the authority to close any loophole they find, protecting the markets, taxpayers and the economy.

Protects Jobs on Main Street:

The interests of Main Street will be protected. Commercial businesses and manufacturers who use these markets and customized contracts to manage risk will still be permitted to do so without imposing additional margin costs. This will protect American jobs and keep consumer costs low.

Protects Municipalities and Pensions:

Swaps dealers will have a “fiduciary duty,” just like investment advisers, that will require the interests of municipalities and pension retirement funds be put first; ensuring Wall Street doesn’t take advantage of Main Street and taxpayers.

Regulates Foreign Exchange Transactions:

Foreign exchange swaps will be regulated like all other Wall Street contracts. At $60 trillion, this is the second largest component of the swaps market and must be regulated.

Increases Enforcement Authority to Punish Bad behavior:

Regulators will be given broad enforcement authority to punish bad actors that knowingly help clients defraud third parties or the public such as when Wall Street helped Greece use swaps to hide the true state of the country’s finances.

I think we all can come together with this topic.

I don't believe it. Change is actually happening and the banks are going to fund it.

LAW, on 21 April 2010 - 01:32 PM, said:

You know who else has "fiduciary duty?" Wall Street Banks. Do they exercise it? Not by a long shot.
I'll believe this legislation is effective when I see it, which will probably be sometime between "never" and "never-ever."
The Democrats need to grow a back-bone, or they'll be bullied (like they are now) for the rest of time.

Republican Regulatory Reform Plan

Committee Republicans introduced comprehensive financial regulatory reform legislation. The Consumer Protection and Regulatory Enhancement Act (H.R. 3310) will protect investors, taxpayers, and consumers, and make Wall Street responsible for its actions. The Republican legislation addresses the causes of the financial crisis, and modernizes the regulatory structure while adopting a new approach to the financial markets, one that no longer includes the taxpayer as the financial backstop of the financial markets.

REPUBLICAN PRINCIPLES:

No More Bailouts. Ensuring taxpayers are never again asked to pick up the tab for bad bets on Wall Street while some creditors and counterparties of failed firms are made whole.

Ending the Government's Practice of Picking Winners and Losers. Insolvent firms will be permitted to fail rather then become wards of the state.

Restore Market Discipline. Financial firms must understand there will be consequences for imprudent business decisions.

SUMMARY OF THE REPUBLICAN PLAN:

Enhanced Bankruptcy. Republicans call for the resolution of insolvent non-bank institutions-no matter how large or systemically important-by creating a new chapter of the bankruptcy code to make it more efficient and better suited for resolving large non-bank financial institutions. This new chapter will facilitate coordination between regulators and the courts to ensure technical and specialized expertise is applied when dealing with these complex institutions. Bankruptcy judges would also have the power to stay claims by creditors and counterparties to prevent runs on troubled institutions.

Market Stability and Capital Adequacy Board. Under the Republican plan, this Board will not have independent enforcement or supervisory authority over individual firms but would be tasked with monitoring the interactions of various sectors of the financial system, and identifying risks that could endanger the stability and soundness of the system. In order to address current regulatory gaps, each functional regulator would be required to assess the effects of their regulated entities' activities on macroeconomic stability and review how entities under their regulatory purview interact with entities outside their purview. The Board will be chaired by the Secretary of the Treasury and comprised of outside experts as well as representatives from the financial regulatory agencies responsible for supervising large, complex firms.

Regulatory Restructuring. The Republican plan would ensure consistent enforcement, accountability and transparency by modernizing the current framework of overlapping and redundant Federal financial regulatory agencies and streamlining supervision of deposit-taking entities in one agency while preserving charter choice as well as the dual banking system. The plan combines the Office of the Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) into one agency and shifts the supervisory functions of the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) to that agency, including the responsibility for overseeing bank and financial holding companies.

Fundamental Reform of the Federal Reserve. The Republican plan would bring transparency and accountability by directing the Government Accountability Office to conduct extensive audits. The plan refocuses the Fed on its core mission of conducting monetary policy by relieving it of current regulatory and supervisory responsibilities and reassigning them to other agencies, and requiring an explicit inflation target. These changes will eliminate the Fed's current incentive to prop up the economy through an accommodative monetary policy to prevent firms from failing. The Republican Plan would impose limitations on the Fed's use of its authority under section 13(3) of the Federal Reserve Act to respond to "unusual and exigent" circumstances by subjecting actions under 13(3) to Treasury approval and giving Congress the ability to disapprove, placing 13(3) transactions on Treasury's balance sheet, and eliminating the use of this authority on behalf of specific institutions.

Government Sponsored Enterprise (GSE) Reform. The Republican plan would phase out taxpayer subsidies of Fannie Mae and Freddie Mac over a number of years and end the current model of privatized profits and socialized losses. It sunsets the current GSE conservatorship by a date certain, placing Fannie and Freddie in receivership if they are not financially viable at that time. If they are viable, once the housing market has stabilized, the plan would initiate the process of cutting their ties to the government by winding down the federal subsidies granted through their charters and transitioning Fannie and Freddie into non-government backed entities that compete on a level playing field with other private firms. In making reforms, Republicans will address reducing Fannie and Freddie's portfolios, re-focusing Fannie and Freddie on promoting housing affordability, and requiring SEC registration and the payment of taxes.

Credit Rating Agency Reform. The Republican plan changes the definition of the Nationally Recognized Statistical Ratings Organization to "nationally registered statistical rating organizations" and removes all references to ratings throughout Federal law and regulation, so that the rating agencies will no longer operate as a government-sanctioned oligopoly.

Protecting Consumers Through Improved Disclosure and Complaint Resolution Procedures. The Republican plan expands the mission of the Financial Literacy and Education Commission to include consumer protection and disclosure issues by giving it the authority to direct regulated entities to disclose relevant policies, procedures, guidelines, standards and regulatory filings on their websites. It streamlines the complaint process for consumers and investors by establishing a single, toll-free number and website to field consumer inquiries and direct them to the appropriate regulatory enforcement agency.

Strengthening Anti-Fraud Enforcement. Increases both civil and criminal money penalties in government enforcement actions, maximizes restitution for victims of fraud, improves surveillance of bad actors who prey on consumers, and allows regulators to share information with foreign regulators and law enforcement agencies engaged in the investigation and prosecution of violations of financial laws without waiving privileges. Monetary recoveries above what is needed to make full restitution to harmed investors or consumers would be used to hire additional enforcement staff.

Republican Whip Eric Cantor (R-VA) today issued the following statement supporting the introduction of a comprehensive House Republican regulatory reform plan introduced by Financial Services Ranking Member, Rep. Spencer Bachus:

"We need smart regulation, not necessarily more regulation. The Administration has placed too much emphasis on government and too little on people. Providing even more power to the same regulators who presided over the market breakdown is not intelligent. The culture of bailouts must stop, and instead of adding yet another layer to the current patchwork regulatory system, we need to bring stability and security back to the market so credit starts flowing and jobs are created.

“Today, thanks to the leadership of Ranking Member Bachus and Republicans on the Financial Services Committee, Republicans are united to reduce uncertainty and to stop the government from picking winners and losers in the marketplace. We want to see market forces return under a set of smart, focused rules to restore financial security for families across this country. We stand ready and willing to work together so that our capital markets can return to prominence, small businesses can access credit, and America starts creating jobs again."

The Consumer Protection and Regulatory Enhancement Act will:

• Provide for the resolution of insolvent non-bank financial institutions — no matter how large or systemically important — through the bankruptcy system.

• Create a Market Stability and Capital Adequacy Board that is charged with monitoring the interactions of various sectors of the financial system, and identifying risks that could endanger the stability and soundness of the system.

• Establish an Office of Consumer Protection, with enhanced authority, within a consolidated regulatory agency to streamline in one place responsibility for rulemaking and enforcement of Federal consumer protection laws.

• Restore the Federal Reserve’s monetary policy mandate by relieving it of current regulatory and supervisory responsibilities.

• End taxpayer subsidies of Fannie Mae and Freddie Mac

• End Federal regulators’ reliance on use of credit rating agencies.

New Yorkers react to President Barack Obama's speech on imposing new financial regulations.

In a nutshell, if the current "reform" legislation passes as is, the Chicago Mercantile Exchange, run by President Obama's buddies, would immediately establish an almost complete monopoly on the exchanges needed to comply with the legislation dealing with the trillions of dollars of derivatives transactions each year. It is estimated that the Chicago Mercantile Exchange would benefit immediately with over $1 billion in additional revenue due to this heist in the name of "reform" (perhaps the Obama SEC should investigate this deal.)

http://www.congress....dir=congressorg
------------------------------------------------------------------------------------------------

Literati, on 23 April 2010 - 07:53 AM, said:

Human,
You would make a good Tea Party member.

The Great Chicago Bank Heist of the 21st Century Exposed
Conservative and GOP Leaders Respond to President Obama's Cooper Union Speech

What do New Yorkers call the so-called Obama Financial Services Reform? "The Great Chicago Bank Heist of the 21st Century!" Under the guise of protecting Main Street and the middle-class, President Obama and his Chicago political machine (Emanuel, Axelrod, Durbin, Jarrett) are secretly preparing to shift thousands of jobs from New York City to Chicago - along with billions of dollars of tax revenue. The Chicago political gang's first step in trying to move the financial center of our country and the financial capital of the world from the Big Apple to the Windy City will begin with this so-called "reform." And worse yet, our New York Democratic Congressional delegation led by Senators Chuck Schumer and Kirsten Gillibrand, are standing by letting it happen even while welcoming President Obama to New York City today.

In a nutshell, if the current "reform" legislation passes as is, the Chicago Mercantile Exchange, run by President Obama's buddies, would immediately establish an almost complete monopoly on the exchanges needed to comply with the legislation dealing with the trillions of dollars of derivatives transactions each year. It is estimated that the Chicago Mercantile Exchange would benefit immediately with over $1 billion in additional revenue due to this heist in the name of "reform" (perhaps the Obama SEC should investigate this deal.)

Currently, most of these derivative transactions are processed through New York-based banks or financial firms with significant trading operations in New York City. These transactions generate approximately $28 billion in annual profits of which billions of taxes are paid to New York City and New York State. They employ thousands of persons and donate to our local charities and little leagues. This also generates hundreds of millions of dollars of additional revenue for smaller banks, brokerages and other businesses that feed off the financial sector. If Obama's bank heist legislation is passed, the New York-based exchanges would not have enough time to set up the operations necessary to accommodate the new rules and hence the Chicago Mercantile Exchange would establish itself as the center of most of these transactions. The way this business works, once you have an "open interest" in one exchange, you keep most of your business with that exchange (to offset margin requirements); so once that is established it is virtually impossible for it to ever be moved.

This business will be forever moved from New York City to Chicago and with it many financial institutions would move more of their operations to Chicago as well. It is conceivable that one day even the stock markets could move to Chicago.

This bill is a job stimulus bill for Chicago and a job killer for New York City. Why can't Senators Schumer and Gillibrand create a level-playing field for New Yorkers? Senators Schumer and Gillibrand, along with the rest of the Democratic Congressional delegation, continue to kowtow to President Obama and his Chicago political gang instead of standing up and fighting on behalf of New Yorkers! That's their job and if they continue to prove they aren't prepared to do their job, then New Yorkers are going to shift their jobs to someone who will stand up and fight for them in November.

This will be the largest transfer of wealth from one city to another in world history. Imagine what would happen to New York City and New York State if Chicago became the financial center of the United States and the financial capital of the world. If President Obama and his buddies at the Chicago Mercantile Exchange have their way, you won't have to imagine too hard - this will become the Obama legacy on New York, otherwise known as the Great Chicago Bank Heist of the 21st Century.

Once again we get confirmation that Chris Dodd is nothing but a paid manservant for his Federal Reserve masters, in addition to being a lame duck, whose last days in office are meant to do everything to allow the old-school Wall Street ways of endless secrecy and Fed bailouts to continue in perpetuity. As Ryan Grim points out "Alan Grayson and co-author Rep. Ron Paul passed legislation through the House that would allow the Government Accountability Office (GAO) to audit the Federal Reserve and, after a delay, release the information to Congress. It was a remarkable victory, with a populist coalition beating back the combined lobbying efforts of the Treasury Department, the Fed and Wall Street banks. The Senate has been more hostile territory for the Fed audit provision. Banking Committee Chairman Chris Dodd (D-Conn.) opposes the Grayson-Paul version, but allowed a much more restrictive audit proposal from Sen. Jeff Merkley (D-Oregon) into his bill." Why and how Dodd believes he can stand against this critical issue, that over 80% of America supports by demanding Fed transparency, is beyond any rational attempts at explanation. How he hopes to get away with it is even more mindboggling.