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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsLawmakers: Rule repeal lets BofA, other banks hold $10T in risky trades
By DEON ROBERTS - NOVEMBER 20, 2015
Two of Congress biggest Wall Street critics say last years rollback of a post-financial crisis regulation has allowed Bank of America and some other big banks to keep nearly $10 trillion in risky trades on their books, Bloomberg reports.
Last week, Democrats Sen. Elizabeth Warren and Rep. Elijah Cummings released their analysis of Decembers partial repeal of a section of the 2010 Dodd-Frank financial overhaul law. The repeal, included in must-pass spending legislation, reversed a provision requiring banks to separate swaps trading from deposit-taking units.
A press release on Warrens website says that, had it not been for the repeal, the roughly $10 trillion in swaps trades would be pushed out to entities not insured with taxpayer funds. Most of that amount is on the books of Bank of America, Citigroup and JPMorgan Chase & Co., Warren said in remarks on the Senate floor last week.
Now, a few banks a few too-big-to-fail banks are going to keep another $10 trillion in risky business on their books, Warren said.
~Snip~
Warren, a member of the Senate Committee on Banking, Housing, and Urban Affairs, said last week the financial services sector continues pushing for repeals of Dodd-Frank rules. One tactic the industry is using is to attach rollback measures to must-pass legislation, like highway and government-funding bills, Warren said.
The lobbyists are swarming this place, she said on the Senate floor. They want to roll back financial regulations, and theyre working every contact they can to attach these rollbacks to anything that moves.
Read more here: http://www.charlotteobserver.com/news/business/banking/bank-watch-blog/article45532833.html#storylink=cpy
tazkcmo
(7,302 posts)We seem to average a financial crisis every 8-10 years.
Winter is coming.
librechik
(30,676 posts)Turbineguy
(37,372 posts)of losing the entire year's GDP.
hobbit709
(41,694 posts)LiberalArkie
(15,729 posts)the Republican party doesn't want the office like they did not want it in 2008.
BlueStateLib
(937 posts)that comes to about $200 billion to $500 billion credit risk, cash value.
Repeal of the Swaps Push Out rule. A swap's underlying asset never changes hands and is never at risk. A swap is an agreement between two parties to exchange a series of future cash flows. How it works/Example: Swaps are financial agreements to exchange cash flows. Swaps can be based on interest rates, stock indices, foreign currency exchange rates and even commodities prices.
All the derivatives in the world add up to $635 Trillion dollars notional value with a cash value
and credit risk of $3.3 Trillion dollars Gross market values
https://www.bis.org/statistics/dt1920a.pdf
think
(11,641 posts)due to the change in Dodd-Frank that was attached to a budget bill over the Christmas holidays last year.
Meanwhile these banks are offshoring other derivatives to avoid regulation:
http://www.reuters.com/investigates/special-report/usa-swaps/
smirkymonkey
(63,221 posts)Insane. I think terrorism is going to be the least of our worries in the coming years.