Sept. 19, 2011
Proposed Loopholes in Wall Street Reform Law Would Invite Dangerous Risk-Taking
Statement by Bartlett Naylor, Financial Policy Advocate, Public Citizen’s Congress Watch Division
Today’s Financial Times reports that regulators may issue blanket permissions for banks to engage in commodity trading, spot currency trading, repurchase agreements and securities lending. Public Citizen believes that drilling holes in the Wall Street reform law designed to prevent banks from high-risk trading would erode the ability of regulators to prevent the kind of excesses that led to the financial crash that erupted three years ago this month. Creating a haven where banks can trade without government oversight invites hazard. Recent reports of UBS’ alleged inability to prevent a single, junior trader from losing $2.3 billion in plain vanilla stock indexes provides little comfort that regulators can ignore any trading venue.
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