Wall Street quietly seeks to undo new financial rules
| Wall Street quietly seeks to undo new financial rules | |
| Published on 11-17-2010 | Email To Friend Print Version |
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Source: McClatchy WASHINGTON — The heavy hitters of finance lost big battles earlier this year during the overhaul of financial regulation, but they’re working hard to win the war. They’re quietly trying to soften, if not kill, some of the more controversial provisions. Lobbyists for Big Finance are working hardest to neutralize the so-called Volcker Rule, which would force big banks to spin off their lucrative proprietary trading operations, in which they invest their own capital in speculative deals. The measure_ named after its proponent, former Federal Reserve Chairman Paul Volcker — seeks to prevent big banks from betting against trades they made on behalf of their customers, a popular practice until the financial crisis exploded in 2008. For example, big investment banks such as Goldman Sachs sold customers overvalued mortgage bonds even as they bet secretly that those bonds would default. Financial lobbyists also are working to soften requirements that Wall Street firms put more “skin in the game” by retaining more mortgage bonds on their books to guard against shoddy lending. They’re also trying to undercut the new Consumer Financial Protection Bureau. Through Republican lawmakers who will soon hold leadership positions in the House of Representatives, big banks are backing proposals that could lead to its being defunded or subject to conditions that weaken it. |
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