By Agri-Pulse Staff
© Copyright Agri-Pulse Communications, Inc.
“Today, Senate Democrats stand united in our commitment to bring transparency and accountability to derivatives,” Dodd said. “We have taken the strongest provisions from our two bills. Under this agreement we will see derivatives moved through clearing houses, traded on exchanges, and facing tough capital and margin requirements that will help stop Wall Street from gambling with our financial security.”
am proud to announce that the major provisions of The Wall Street Transparency
and Accountability Act approved by the Senate Agriculture Committee are
included in the final Wall Street reform package. This is landmark reform that
will bring the $600 trillion derivatives market out of the dark and into the
light of day, ending the days of backroom deals. Chairman Dodd and I have
produced the strongest reforms to date and we must move forward to bring the
necessary regulations to our nation’s financial system,”
To read the full text of the reform bill, go to: http://ag.senate.gov/site/legislation.html
According to Lincoln and Dodd, their merged bill:
“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
“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 Addresses “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
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
“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.
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
To read about Monday’s Senate vote against allowing floor debate on the financial reform bill, go to: www.agri-pulse.com/20100426H1.asp
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