Skip to comments.Why Dodd-Frank left JP Morgan unguarded
Posted on 05/19/2012 3:01:46 PM PDT by Starman417
The Dodd Frank law was supposed to rein in abuses by Wall St. It was supposed to end "too big to fail." It was supposed to end so-called "risky trading" by banks. Some of us knew better. Barack Obama was effusive in his praise of the bill as he signed it.
We are gathered in the heart of our nations capital, surrounded by memorials to leaders and citizens who served our nation in its earliest days and in its days of greatest trial. Today is such a time for America.
Over the past two years, we have faced the worst recession since the Great Depression. Eight million people lost their jobs. Tens of millions saw the value of their homes and retirement savings plummet. Countless businesses have been unable to get the loans they need and many have been forced to shut their doors. And although the economy is growing again, too many people are still feeling the pain of the downturn.
Now, while a number of factors led to such a severe recession, the primary cause was a breakdown in our financial system. It was a crisis born of a failure of responsibility from certain corners of Wall Street to the halls of power in Washington. For years, our financial sector was governed by antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy.
Unscrupulous lenders locked consumers into complex loans with hidden costs. Firms like AIG placed massive, risky bets with borrowed money. And while the rules left abuse and excess unchecked, they also left taxpayers on the hook if a big bank or financial institution ever failed.
Now, even before the crisis hit, I went to Wall Street and I called for common-sense reforms to protect consumers and our economy as a whole. And soon after taking office, I proposed a set of reforms to empower consumers and investors, to bring the shadowy deals that caused this crisis into the light of day, and to put a stop to taxpayer bailouts once and for all. (Applause.) Today, thanks to a lot of people in this room, those reforms will become the law of the land.
We can sleep well
Now, beyond the consumer protections Ive outlined, reform will also rein in the abuse and excess that nearly brought down our financial system. It will finally bring transparency to the kinds of complex and risky transactions that helped trigger the financial crisis. Shareholders will also have a greater say on the pay of CEOs and other executives, so they can reward success instead of failure.
Obama is standing watch
And finally, because of this law, the American people will never again be asked to foot the bill for Wall Streets mistakes. There will be no more tax-funded bailouts -- period. If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy. And there will be new rules to make clear that no firm is somehow protected because it is too big to fail, so we dont have another AIG.
Yet despite their significant contribution to the financial meltdown, the GSE's were left untouched by Dodd-Frank. And they weren't all that was left untouched.
Last week JP Morgan, headed by Obama pal Jamie Dimon, announced that it had lost $2 billion in trading.
Dodd-Frank was supposed to regulate derivatives trading as such trading was a significant contributor to the financial disaster which struck this country in 2008. Sen. Dianne Feinstein once again proved she has no interest in reading bills for which she votes.
(Excerpt) Read more at floppingaces.net...
These leaders are people that frankly, need to be tried in courts, sentenced, and in some cases, executed, for betraying the public trust.
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