The CFTC Must Reject Calls to Delay its Cross Border Rules & Must Protect US Taxpayers Now
“The CFTC must reject the latest calls by Wall Street, its allies and foreign governments to stop financial reform, which is essential to protect the American people from another financial crisis and more bailouts,” said Dennis Kelleher, President and CEO of Better Markets, a nonprofit organization that promotes the public interest in the financial markets.
“Claims that the U.S. should wait to protect its own taxpayers and financial system until whenever foreign governments get around to enacting their own reforms are as inexplicable as they are indefensible. The U.S. should not subordinate the protection of its own citizens to uncertain future actions by foreign governments, which utterly failed to regulate financial activities in their own countries to protect their own people during the last crisis,” Mr. Kelleher said.
“It was the U.S. government and taxpayers who bailed out the global financial system in 2008. Other countries bailed out their domestic banks, but only the U.S. bailed out foreign banks. Foreign banks were 9 of the top 20 largest users of US Federal Reserve Bank bailout programs. The U.S. pumped $1.9 trillion into foreign swap lines in the 30 days after the collapse of Lehman Brothers and $5.4 trillion in the 90 days afterwards. The list of actions taken by the US government and taxpayers to save the global financial system and prevent a Second Great Depression is very long. The list of actions by foreign governments is short to nonexistent,” said Mr. Kelleher.
“With the US footing the bill, it is irresponsible to suggest that the U.S. should just wait while foreign governments drag their feet on implementing reform,” Mr. Kelleher said.
“Claims that the CFTC needs more time are also meritless. The CFTC has worked on the cross-border issue for years and there have already been a number of delays. After more than a year of deliberation and consideration, including extensive, unlimited input from industry, the CFTC proposed its guidance in June 2012, a year ago. Yet more input, deliberation and consideration followed its initial proposal, resulting in yet more guidance issued in December of 2012. A deadline was set at that time of July 12, 2013, more than six months ago,” Mr. Kelleher said.
“After more than two years of work, deliberation, consideration and input, there are still five more weeks before the deadline. Rather than seeking more delay, CFTC Commissioners need to get to work to finalize the guidance and finally protect the American people from the threats in the derivatives markets like those of AIG, Lehman Brothers, Bear Stearns and so many others that caused the crisis last time,” said Mr. Kelleher.
“The Wall Street-caused financial collapse of 2008 was the worst since 1929 and has caused the worst economy since the Great Depression. As shown by extensive study, the financial crisis is going to cost the U.S. more than $12.8 trillion. Making sure that never happens again is what is at stake in getting financial reform in place as quickly and thoroughly as possible. It’s been almost five years since the crisis, more delay is inexcusable,” said Mr. Kelleher.
Better Markets is an independent, nonprofit, nonpartisan organization that promotes the public interest in financial reform in the domestic and global capital and commodity markets. Better Markets advocates for transparency, oversight and accountability with the goal of a stronger, safer financial system that is less prone to crisis and failure thereby eliminating or minimizing the need for more taxpayer funded bailouts.