Posted on 12/11/2014 10:42:21 AM PST by Laissez-faire capitalist
A Republican has joined Democrats in criticizing the inclusion of a partial repeal of the Dodd-Frank financial reform law in legislation funding the government.
Sen. David Vitter (R-La.) signed on to a letter with Sen. Sherrod Brown (D-Ohio) that calls on congressional leaders to scrap portions of the $1.1 trillion "cromnibus" that relax restrictions on banks trading financial derivatives.
The pair argued in the letter that there is "broad bipartisan support" for removing that particular language.
Brown and Vitter, who have worked together in the past on bills to limit big banks, argued that the language was unfairly jammed into the 1,603 page bill without proper debate.
"Congress should not gamble on a possible government shutdown by attempting to tuck this controversial provision into a spending bill without having been considered by the committees of jurisdiction, where it can be subjected to a transparent and vigorous debate," they wrote.
The language at stake would repeal a portion of the 2010 financial reform law that bars banks from trading risky financial derivatives within the portion of their institution that is guaranteed by the Federal Deposit Insurance Corporation.
Critics of the provision argue removing that prohibition could expose taxpayers to risks if banks trade in derivatives and end up collapsing, requiring and FDIC rescue.
"If Wall Street wants to gamble," Congress should force them to pay for their losses," they wrote.
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(Excerpt) Read more at thehill.com ...
There was no fallacy, and you were unable to identify any.
plus your use of Ad Hominem here, shows that you are a pro-GOP-e RINO
I assume you are blissfully unaware of the irony here.
Again, you simply do not know what a credit derivative is.
It is dishonest of you to lecture people on the use of instruments that you cannot identify or understand.
For a commercial hedge among sophisticated and (initially) well capitalized parties, no deposit insurance is necessary.
Huh? What am I missing here? If the banksters wish to gamble with their depositor's money aren't they breaking the law by restoration of the prohibition against derivatives trading?
If their gambling isn't guaranteed by the FDIC, won't that force many of them to go back to making money by old-fashioned methods such as car loans, home loans and the like?
I would like to see all of Dodd Frank repealed and Glass Steagall re-instated.
.....to wideawake and Laissez Faire Capitalist:
I don’t understand what either one of you guys are saying about this complex subject and I know more than a little bit about big risk.
How about a compromise and that is that whatever Ted Cruz thinks about the subject be good enough for all of us since he’s the only honest person in the Congress. Well, maybe there are a few more!
I’ll try to act surprised when they all vote for it.
Can you tell my why banks get the profits if their gamble pays off and taxpayers get the bill if it does not? Does that sound like free market capitalism to you?
“Can you tell my why banks get the profits if their gamble pays off and taxpayers get the bill if it does not? Does that sound like free market capitalism to you?”
Good point.
It's not self-evident that banks engage in derivative swaps only to the extent necessary to hedge interest rate risk, rather than to a speculative extent.
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