WASHINGTON, D.C. — Cantrell Dumas, Director of Derivatives Policy at Better Markets, issued the following statement in connection with the release of a new fact sheet warning that Washington is once again laying the groundwork for the next financial crisis: 

“A dangerous wave of deregulation is once again gaining momentum in Washington. Policymakers, lobbyists, and industry actors are reviving the same arguments that led to the 2008 financial crash, masked in the language of innovation and access. Whether it is event contracts that resemble gambling, new financial products like perpetual futures that are being introduced without clear rules or proper oversight, or legislative efforts around crypto that gut oversight by carving out broad exemptions and pretending that certain products do not need any rules at all, the contours of another crisis are starting to emerge.  

“This is exactly how over-the-counter swaps were treated under the Commodity Futures Modernization Act, which removed them from regulatory reach and set the stage for a crisis that devastated the global economy. Once again, risky markets are being carved out of oversight based on industry promises and political pressure, and once again, the public will be left to pay the price when it all falls apart. 

“The question is not whether there will be another financial crisis. The question is when. When unregulated risk is allowed to accumulate in the dark, it eventually erupts into the daylight. Workers, families, and communities who had nothing to do with risky speculation are then unjustly faced with the devastating consequences.  Taking enormous risks in the name of financial innovation becomes easier when firms are confident that American taxpayers will ultimately bear the cost if things go wrong. That is not capitalism. It is an unacceptable moral hazard. And it is the same dynamic that fueled the last crisis. 

“As we mark the 50th anniversary of the CFTC and the 15th anniversary of Dodd-Frank, we should be strengthening financial safeguards, not weakening them. The public interest must be the foundation of financial regulation, not an afterthought.” 

The Fact Sheet is available here.  

### 

Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.