Dodd-Frank, Glass Steagall & Wall Street

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The recent financial recession led to widespread calls for changes in the regulatory system. In June 2009, President Obama introduced a proposal for a sweeping overhaul of the United States financial regulatory system. The proposal was the Dodd-Frank Wall Street Reform and Consumer Protection Act, better known as Dodd-Frank.
In simple terms, Dodd-Frank is a law that places major regulations on the financial industry. It grew out of the our recent Recession with the intention of preventing another collapse of a major financial institutions, after all who could forget Lehman Brothers.
The reform act's main goal is to subject banks to a number of regulations and implement the process of breaking them up should any of these banks be determined as "too big to fail". This measure is to avoid any financial institutions getting so large and so interconnected that their failure would be disastrous to the economy. .Dodd-Frank also requires that the riskiest derivatives like credit default swaps be regulated by the SEC or the Commodity Futures Trading Commission(CFTC). To help make them more transparent similar to the stock exchange, it must be set up so these derivative trades can be transacted in public. However, Dodd-Frank left it up to the regulators to determine exactly the best way to put this into place. And this is where the Wall Street lobbyists come in to enact compromises for the regulations put forth. Today bank lobbyists are constantly being deployed in large numbers to visit regulators and provide them with written proposals on how to implement rules and regulations. For instance, in the case of whether regulators would exempt certain in-house derivatives trades between affiliates of big banks, Citigroup lobbyists sent forth a ;l..p that basically exempted a wider array of derivatives. Their recommendation was reflected in the House Committee's bill in which two crucial paragraphs were actually copied word for word from the Citigroup's proposal.
I talked to Filmmaker Danny Schechter, Senior Editor of EIR Jeff Steinberg and Candidate for New Jersey Governor Diane Sare.

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