Posted 7 years ago on March 26, 2013, 12:18 p.m. EST by GirlFriday
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A bipartisan group of four representatives introduced a sneaky little bill Wednesday that would dismantle a huge chunk of the historic financial reform laws enacted after the financial crisis.
The Swap Jurisdiction Certainty Act, introduced by Reps. Scott Garrett (R-N.J.), Mike Conaway (R-Tex.), John Carney (D-Del.), and David Scott (D-Ga.), three of whom sit on the House Financial Services Committee, would allow big banks to shift risky activities to foreign subsidiaries in order to avoid US regulations. Part of the landmark 2010 Dodd-Frank financial reform act requires that derivatives—financial products whose value is based on things like currency exchange rates and crop prices—be traded in public marketplaces, instead of in private. The new bill could exempt foreign companies from these US derivatives rules, which sounds reasonable; the law purportedly just affects other countries. But what it would mean is that huge US-based banks that operate internationally could just do their paperwork through their international arms to avoid US regulations, effectively gutting the section of Dodd-Frank that gave federal regulators the authority for the first time to regulate derivatives such as the credit default swaps that helped cause the 2007 bank failures.
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See, look, bipartisan. A two-fer.