Rep. Jim Himes (D-Conn.), a former Wall Street executive, is joining Rep. Randy Hultgren (R-Ill.) to introduce legislation that would deregulate derivatives, undercutting one of the most meaningful elements of the 2010 Dodd-Frank Wall Street Reform Act.Derivatives -- which Warren Buffett has referred to as “financial weapons of mass destruction” -- are viewed as a key trigger of the 2008 economic crisis.
The bill would "allow banks to keep commodity and equity derivatives in federally insured units," Politico reported on Wednesday, meaning that banks would no longer be forced to spin off their trading desks. It would weaken Dodd-Frank's "push out" provision, otherwise known as the Prohibition Against Federal Government Bailouts of Swaps Entities, which bars federal assistance from being provided to any swaps entity.
Himes, who was recently named the national finance chairman of the Democratic Congressional Campaign Committee, is a former executive at Goldman Sachs, where he was a vice president.
In 2010, Himes took heat from consumer advocates for opposing the Senate’s version of the financial reform bill, at which point he characterized derivatives as a “political football.”
“The discussion of derivatives in the political world has become a zero sum game,” Himes told the Connecticut Mirror. “But there’s a lot more common ground here than the people who are yelling about this would have you believe.
During a testimony before the Senate last week, Federal Reserve Chairman Ben Bernanke expressed support for Himes and Hultgren’s proposal, Politico reported.
Original Article
Source: huffingtonpost.com
Author: Chelsea Kiene
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