When Wall Street traders sense opportunity in the markets they pursue it with a sharklike intensity. After scoring a victory in Washington that repeals a rule that the industry has long assailed, the large banks are most likely weighing where to strike next. Wall Street won when the House of Representatives on Thursday passed a broad spending bill that contained a provision that rolls back a rule affecting derivatives, the financial product that helped cause the financial crisis of 2008. The Senate is expected to pass the budget legislation containing the repeal this weekend. A repeal would show that, six years after the financial crisis, large banks have found a way to kill off regulations that were part of the Dodd-Frank Act, the sweeping legislation that Congress passed in 2010 to overhaul the financial system. The House’s vote seemed to reverberate around Washington on Friday. “I thought that, when Dodd Frank started, that the banks would not succeed in influencing it, having lost all the prestige they lost,” said Stanley Fischer, the vice chairman of the Federal Reserve, at a conference on Friday at the Peterson Institute for International Economics in Washington. “Boy, was I wrong,” he added. Wall Street’s recent campaign also suggests that large banks now see fewer risks in openly fighting to overturn regulation. Citigroup, which received over $50 billion of bailout money after it nearly collapsed in 2008, helped write legislation that was behind the proposed repeal of the rule. And The Washington Post reported that Jamie Dimon, the chief executive of JPMorgan Chase, called lawmakers to express his support for the repeal. Only last year, Mr. Dimon was fighting to save his professional reputation after his bank racked up huge losses trading the type of instruments that the derivatives rule focused on. More:
Posted on: Tue, 16 Dec 2014 03:25:33 +0000
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