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The Fed’s and Republicans’ War Against Dodd Frank and How That Preserves the Greenspan Put
Posted on January 12, 2015 by Yves Smith
A new story by Gretchen Morgenson of the New York Times highlights how the Federal Reserve and the Republicans* are on a full bore campaign to render Dodd Frank a dead letter, with the latest chapter an effort to pass HR 37, a bill that would chip away at key parts of Dodd Frank.
Mind you, we weren’t wild about Dodd Frank precisely because the bill did far too little to stop the reckless practices that produced the crisis. But both the Fed and the newly ascendant Congressional Republicans are keen to restore as much as possible the status quo ante that proved so lucrative to the banks, both the pre-crisis period and the bailouts, which stands as the greatest transfer of wealth in history. So even mild reform must be swept away.
Not that the Fed or the Republicans, and the bankers they represent, are being so frontal as to try to repeal Dodd Frank, mind you. Their strategy is a combination of endless implementation delays, like Penelope dealing with her suitors, and modifying or eliminating technical-sounding provisions that are of keen importance to the banksters. The assumption is that the chump public won’t figure out that Congress and the central bank are handing major concessions to big financiers with no punishments or required behavior changes attached. Morgenson isn’t alone in calling out this strategy. David Dayen and your humble blogger have also warned about it.
For the Republicans, any and every measure to help the banks is standard operating procedure (and let’s not kid ourselves, the Democrats give the banks most of what they want but do try to throw a few bones to Main Street and “consumers” to improve the optics).
The Fed’s and in Particular Scott Alvarez’s Role in Stymieing Bank Reform
http://www.nakedcapitalism.com/2015/01/the-feds-and-republicans-war-against-dodd-frank.html
Posted on January 12, 2015 by Yves Smith
A new story by Gretchen Morgenson of the New York Times highlights how the Federal Reserve and the Republicans* are on a full bore campaign to render Dodd Frank a dead letter, with the latest chapter an effort to pass HR 37, a bill that would chip away at key parts of Dodd Frank.
Mind you, we weren’t wild about Dodd Frank precisely because the bill did far too little to stop the reckless practices that produced the crisis. But both the Fed and the newly ascendant Congressional Republicans are keen to restore as much as possible the status quo ante that proved so lucrative to the banks, both the pre-crisis period and the bailouts, which stands as the greatest transfer of wealth in history. So even mild reform must be swept away.
Not that the Fed or the Republicans, and the bankers they represent, are being so frontal as to try to repeal Dodd Frank, mind you. Their strategy is a combination of endless implementation delays, like Penelope dealing with her suitors, and modifying or eliminating technical-sounding provisions that are of keen importance to the banksters. The assumption is that the chump public won’t figure out that Congress and the central bank are handing major concessions to big financiers with no punishments or required behavior changes attached. Morgenson isn’t alone in calling out this strategy. David Dayen and your humble blogger have also warned about it.
For the Republicans, any and every measure to help the banks is standard operating procedure (and let’s not kid ourselves, the Democrats give the banks most of what they want but do try to throw a few bones to Main Street and “consumers” to improve the optics).
The Fed’s and in Particular Scott Alvarez’s Role in Stymieing Bank Reform
http://www.nakedcapitalism.com/2015/01/the-feds-and-republicans-war-against-dodd-frank.html
