The House Agriculture Committee today approved a set of rollbacks to the section of the Dodd-Frank Act dealing with the over-the-counter swaps markets
Americans for Financial Reform released the following statement in response:
“Last week’s Senate report on JPMorgan Chase’s ‘London Whale’ trades should have redoubled Washington’s resolve to carry out the basic derivatives safety measures of Dodd-Frank. But too many members of the House Agriculture Committee seem to have their heads buried in the sand. Today, the committee passed legislation that would enable public bailouts of swaps dealers, weaken the ability of regulators to control derivatives trading in overseas subsidiaries of Wall Street banks, and establish a blanket exemption for derivatives transactions among the thousands of subsidiaries of global banks.
“The ‘London Whale’ revelations show that the biggest of the too-big-to-fail banks have yet to be deterred from the 'business as usual' practices that created the financial crisis. At today’s markup, the House Agriculture Committee also voted to continue business as usual, putting Wall Street’s demands ahead of the rest of the economy. What's especially striking is that so many of these bills – such as HR 992 on public support of derivatives dealing, and HR 1256 on foreign derivatives transactions – could directly enable the very kind of abuses exposed by the London Whale investigation.
“We hope that as other legislators and the public have time to consider these proposals, Congress will decide to stand up for effective derivatives regulation.”