June 29, 2016
Public Citizen Applauds New Legislation to Improve Federal Oversight of Risky Derivatives and Swaps Market
Statement of Public Citizen Experts
Note: U.S. Sen. Elizabeth Warren (D-Mass.) introduced a new derivatives regulation bill with U.S. Sen. Mark Warner (D-Va.) today. The Derivatives Oversight and Taxpayer Protection Act will strengthen federal oversight of the derivatives market and ensure that big financial firms – not taxpayers – are on the hook for derivatives losses. The largest Wall Street banks dominate 95 percent of the U.S. market for derivatives, and can be expected to fight or obstruct this legislation to protect their profits and privileged positions. With this legislation, Warren and Warner have shown courage and foresight in taking on this powerful lobby and standing up for the public interest.
“Simply by ending favorable treatment of derivatives contracts in bankruptcy courts, the Warren-Warner bill cuts off the prime attraction of these bets. The current temptation is that these gambles pay off even when the bank behind them blows up.”
Lisa Gilbert, director of Public Citizen’s Congress Watch division
“The Warren-Warner bill is actually a comprehensive reform that will be the focus of attention for months, if not years, as Washington inevitably comes to its senses about Wall Street’s place in the economy.”
Bartlett Naylor, financial policy advocate for Public Citizen’s Congress Watch division