Labor & Employment Law

In Financial Reform Fight, It?s Banks? Billions vs. People?s Anger

By Mike Hall

The fight to win strong and effective financial reform legislation is a “David vs. Goliath” match that pits Wall Street’s bazillions of dollars against the public’s deep and growing anger, Heather Booth, executive director of the coalition Americans for Financial Reform said today. In a briefing for bloggers today at the AFL-CIO in Washington, D.C., Booth said:

Since last year and though this year, [Big Banks] are spending $1.4 a day in lobbying and political expenses to fight reform. But the people are not divided over this. They want the banks to be reined in.

The U.S. Senate is expected to act in the coming weeks on the financial reform bill that the Senate Banking, Housing and Urban Affairs Committee approved last month. AFL-CIO Policy Director Damon Silvers said the fight is

fundamentally about who runs the economy. Is the financial system the servant or the master of the economy?

Silvers said the Senate bill, like the House bill approved in December, is going in the right direction but needs to be strengthened. He told the group that while there will be attempts to both weaken and strengthen the bill, the public is looking for tough new regulations not mushy compromises.

Meaningful financial reform will only be achieved by putting forth a strong bill and then fighting for it. The public is demanding accountability.

He said the bill must include a strong, independent Consumer Financial Protection Agency with authority to protect working families from dangerous financial products and practices.

It also must set new rules to bring transparency to the “shadow market” of derivatives, hedge funds and private equity instead of the near rule-free, Wild West world that led to the meltdown of the housing market and the near collapse of the economy.

Silvers said the legislation needs to create a new, fully public systemic risk regulatory body that would set capital and liquidity requirements that become increasingly strict as financial institutions get larger and more risky. That would end the “too big to fail” philosophy that led to the $750 billion Big Bank bailout that

put money in the pockets of people who blew up their own companies.

Full post as published by AFL-CIO NOW BLOG on April 09, 2010 (boomark / email).