The House passed a bipartisan written bill that allows banks to avoid new financial rules by operating overseas. Financial Reformers are happy about one thing- most Democrats voted against the bill. This signals a rocky road ahead for similar efforts to scale back new rules on banks. This also makes the bills passage in the Democrat led Senate less likely.
The bill in question, the Swap Jurisdiction Certainty Act was introduced earlier this year. It would exempt foreign arms of U.S. Banks from the new regulations on derivatives that are required by the Dodd/Frank Act. The bill was introduced as an effort to stem governnent over reach.
The House Financial Services Committee passed the bill just a few weeks ago, 11 Democrats voted against it and 0 Republicans out of the 61 member committee. Wall St. reformers and their allies in Congress rallied the troops, changing some minds. 122 out of 195 Democrats voted against it and 2 Republicans voted against it. It passed 301-124, these people will never learn or maybe never care.
Past moves to weaken financial regulations have recieved strong bipartisan support. Obviously that has changed, more Democrats than not will support Financial Reform. The fact Democrats are willing to deny Wall St. of their wishes and oppose the bill may help regulators resolve in doing their jobs. Reformers are hopeful Democrat objection to the bill could impede other attacks on the rules governing U.S. Banks foreign operations.
Wall St. is spending a lot of money lobbying regulators to weaken the Dodd/Frank regulations. Others worry about the financial industry trying to roll back regulations on foreign operations through a giant free trade deal being negotiated. Europe is calling U.S. regulations proposed overseas rules to aggressive. The deregulation of U.S. Banks overseas operations may cause them to concentrate business in less regulated foreign markets. Almost every major financial scandal involving derivatives has included trades conducted through a foreign entity. This sounds like a sound policy if we are trying to hurt the economy.
Before you know it our financial system will be in the crapper. Too Big To Fail Banks will again be at the forefront of the collapse. We will have to bail out these reckless businesses again. These banks should have been broken up and made to stay away from derivatives. But the amount of lobbying money us too much for Congress to pass up, even if it cripples our country. Greedy sods like this have cost the American people one to many times. Elizabeth Warren might be our last hope at protection, hopefully President Obama will support her.