Friday, December 11, 2009

Banker's Coup over Reform

Financial Reform has failed.

What the House passed today is a banker's lobbyist triumph.  The loopholes are so numerous and big enough to drive all of GM's products through at one time.  While the bill puts a false facade of reform, the loopholes have so benefited the banks that they should assume those government posts which they do not already defacto control.  The new stories are already glossy over the loopholes to obscure them from public view.  However, Washington's Blog succinct dissected the so called reforms and even included a link to the House Amendment which was acted on today.

Economics professor L. Randall Wray further delineates the "wimpy" reforms which fail to protect society from those whose greed would destroy for profit and proposes that any regulated and protected financial institution should be prohibited from trading derivatives and a need to concentrate on the systemically dangerous.

This coup by the financial services lobbyist has been brewing as we have reported on the radio show since last Summer as this blog entry from Satyjit Das from July shows. He demolishes the proposed derivatives protections.

State authority over banks is diminished.  Investment advisors associated with a broker-dealer have been saved from regulatory oversight and inspection of their business practices, while we lowly conflict-free registered investment advisors must submit to the regulatory oversight any investment advisor should be required to accept.  Professional fiduciary duty is a "dream" while the wolves net of suitability swims and the heads bow towards the inevitability of "unavoidable" conflict of interest fiduciary "responsibility" of sales people.

Of the many Democrats and Republicans who carried the financial interest banners high from the mast of their check books, one of the more prominent is Melissa Bean of Illinois.

Yves Smith of naked capitalist has a good post on Coup by Bankers that covers the many proposed amendments diluting reform and in a later post urged individuals to call their representatives no matter how much politics sucks.

I do not enjoy negative comments, but the truth is the driver.  When you read the links above and then read the news stories tonight and tomorrow, be prepared to puck.

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