How Wall Street Aims to Keep U.S. Regulators Out ..... - News and Current Events | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events

How Wall Street Aims to Keep U.S. Regulators Out .....
Started:June 21st, 2012 (05:43 PM) by kbit Views / Replies:207 / 0
Last Reply:June 21st, 2012 (05:43 PM) Attachments:0

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

How Wall Street Aims to Keep U.S. Regulators Out .....

Old June 21st, 2012, 05:43 PM   #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,839 since Nov 2010
Thanks: 3,275 given, 3,321 received

How Wall Street Aims to Keep U.S. Regulators Out .....

The Commodity Futures Trading Commission, the main regulator of derivatives (bets on bets), wants to extend Dodd-Frank regulations to the foreign branches and subsidiaries of Wall Street banks.

Horror of horrors, say the banks.

"If JPMorgan overseas operates under different rules than our foreign competitors," warned Jamie Dimon, chair and CEO of JP Morgan, Wall Street would lose financial business to the banks of nations with fewer regulations, allowing "Deutsche Bank to make the better deal."

This is the same Jamie Dimon who chose London as the place to make highly risky derivatives trades that have lost the firm upwards of $2 billion so far and could leave American taxpayers holding the bag if JPMorgan's exposure to tottering European banks gets much worse.

The Dimon Loophole

Dimon's foreign affair is itself proof that, unless the overseas operations of Wall Street banks are covered by U.S. regulations, giant banks like JPMorgan will just move more of their betting abroad hiding their wildly-risky bets overseas so U.S. regulators can't control them. Even now, no one knows how badly JPMorgan or any other Wall Street bank will be shaken if major banks in Spain or elsewhere in Europe go down.

Call it the Dimon loophole.

This is the same Jamie Dimon, by the way, who at a financial conference a year ago told Fed chief Ben Bernanke there was no longer any reason to crack down on Wall Street. "Most of the bad actors are gone," he said. "[O]ff-balance-sheet businesses are virtually obliterated money market funds are far more transparent" and "most very exotic derivatives are gone."

Still Too Big to Fail?

One advantage of being a huge Wall Street bank is you get bailed out by the federal government when you make dumb bets. Another is you can choose where around the world to make the dumb bets, thereby dodging U.S. regulations. It's a win-win.

Wall Street would like to keep it that way.

For two years now, squadrons of Wall Street lawyers and lobbyists have been pressing the Treasury, Comptroller of the Currency, Commodity Futures Trading Commission, SEC, and the Fed to go easier on the Street for fear that if regulations are too tight, the big banks will be less competitive internationally.

Translated: They'll move more of their business to London and Frankfurt, where regulations are looser.

A Regulatory Homecoming?

Meanwhile, the Street has been warning Europeans that, if their financial regulations are too tight, the big banks will move more of their business to the U.S., where regulations will (they hope) be looser.

After the Basel Committee on Banking Supervision (a global financial regulatory oversight body) came up with a new set of rules to toughen bank capital and liquidity requirements, European officials threatened to get even tougher. They approved a new system of European regulatory bodies with added powers to ban certain financial products or activities in times of market stress.

This prompted Lloyd Blankfein, CEO of Goldman Sachs, to issue in the words of the Financial Times "a clear warning that the bank could shift its operations around the world if the regulatory crackdown becomes too tough."

Blankfein told a European financial conference that, while Europe remains of vital importance to Goldman, with less than half of the bank's business now generated in the U.S., the introduction of "mismatched regulation" across different regions (that is, tougher regulations in Europe than in the U.S.) would tempt banks to search out the cheapest and least intrusive jurisdiction in which to operate.

"Operations can be moved globally and capital can be accessed globally," he warned.

Someone should remind Dimon and Blankfein that a few years ago they and their colleagues on the Street almost eviscerated the American economy, and that of much of the rest of the world. The Street's antics required a giant taxpayer-funded bailout. Most Americans are still living with the results, as are millions of Europeans.

Wall Street can't have it both ways too big to fail, and also able to make wild bets anywhere around the world.

If Wall Street banks demand a free reign overseas, the least we should demand is they be broken up here.

Reich: How Wall Street Aims to Keep U.S. Regulators Out of Its Global Betting Parlor | The Exchange - Yahoo! Finance

Reply With Quote

Reply > Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events > How Wall Street Aims to Keep U.S. Regulators Out .....

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
Wall Street Warriors Big Mike Traders Hideout 14 January 3rd, 2013 12:39 AM
Psychos on Wall Street kbit News and Current Events 2 March 5th, 2012 10:51 PM
shit-wall-street-says madLyfe Jokes 0 February 16th, 2012 08:20 AM
Wall Street Bonuses Big Mike Off-Topic 2 October 26th, 2011 10:43 PM
Volcker Rule Splits Regulators, Adding to Wall Street's Worries Quick Summary News and Current Events 0 October 17th, 2011 11:30 AM

All times are GMT -4. The time now is 02:46 AM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-28 in 0.10 seconds with 19 queries on phoenix via your IP