U.S. banks moved billions of dollars in trades beyond Washington’s reach

[Banjo]

The story of how Wall Street’s giants got around derivatives rules imposed by the CFTC after the financial crisis. The fix: tweaking contracts and shifting deals offshore

http://www.reuters.com/investigates/special-report/usa-swaps/

 

[volpunter]

Ex Goldman, Jewish, and at the helm of one of the most important US regulators. What an ironic mix. Of course there are no conflicts of interest at all...

Oh wait, we are allowed to use the term anchor babies, Muslim terrorists , Mexican drug dealer immigrants but must never ever talk about Jews. What the heck got into me...

The story of how Wall Street’s giants got around derivatives rules imposed by the CFTC after the financial crisis. The fix: tweaking contracts and shifting deals offshore

http://www.reuters.com/investigates/special-report/usa-swaps/

 

[wrbtrader]

Clever little boogers aren't they.

 

[ktm]

This is a great article. The public is absolutely clueless about what goes on in the real world of banking. The politicians will stand on their soapboxes and brag about all the great rules they pass and how they are cracking down on the "Wall St fat cats" - and neatly tucked in every one of them is a loophole that makes the entire thing an exercise in political capital collection.

Remember this the next time you hear a candidate bragging about how they are going to get tough on Wall St.

 

[eurusdzn]

Ex Goldman, Jewish, and at the helm of one of the most important US regulators. What an ironic mix. Of course there are no conflicts of interest at all...

Oh wait, we are allowed to use the term anchor babies, Muslim terrorists , Mexican drug dealer immigrants but must never ever talk about Jews. What the heck got into me...

We? You are not "we" my friend, despite your suttle insertion into the fabric of our American rascism.

 

[i960]

Once again - lobbying rears it's head as usual.

 

[blakpacman]

So the banks' new derivative contracts are not guaranteed, then if bets go the wrong way for the bank (i.e. billions in CDS goes , they can give a big "F You" middle finger and simply walk away from the trade? And since the big banks are the only games in town selling these derivative contracts, the hedge funds' or other investors' only choice is to say "thank you sir, may I have another?"

 

[volpunter]

I must insist on we. Because poor buggers who cannot but be politically correct (such as yourselves) would else have no voice.

Again: Ex Goldman, Jew, turn regulator: What could possibly go wrong....?!?

We? You are not "we" my friend, despite your suttle insertion into the fabric of our American rascism.

 

[ktm]

So the banks' new derivative contracts are not guaranteed, then if bets go the wrong way for the bank (i.e. billions in CDS goes , they can give a big "F You" middle finger and simply walk away from the trade? And since the big banks are the only games in town selling these derivative contracts, the hedge funds' or other investors' only choice is to say "thank you sir, may I have another?"

Rule #1 in high finance - He who has the gold makes the rules.

 

[i960]

I must insist on we. Because poor buggers who cannot but be politically correct (such as yourselves) would else have no voice.

Again: Ex Goldman, Jew, turn regulator: What could possibly go wrong....?!?

Okay, to be fair here, how is Gensler aiding and abetting the banks here? He specifically placed an exception in the rules and it's that exception which the banks have a beef with.

"In 2009, soon after Gensler took the job, Congress was hashing out the Dodd-Frank bill. A powerful Republican congressman, Rep. Spencer Bachus of Alabama, put forth an amendment that would keep banks’ overseas operations outside the new rules. Alarmed, the Democratic co-sponsor of the bill, Rep. Barney Frank, asked Gensler to craft a counter-proposal.

Gensler and his staff tucked a 17-word insert into a 228-page amendment to the Dodd-Frank bill. The addition seemed to assure banks that the new derivatives rules wouldn’t apply to their overseas trading operations. Bachus backed off. But the insert was craftily worded to leave wiggle room. If those activities “have a direct and significant connection with activities in, or effect on, commerce of the United States,” then the rules would apply, Gensler’s addition read.

One year later, at a late 2010 meeting of the CFTC’s board, one of Gensler’s legal aides declared that the passage in fact gave the regulator worldwide reach over U.S. banks’ trading operations.

A coalition of 13 global banks banded together to fight the clause. They hired Edward J. Rosen, a derivatives lawyer with Cleary Gottlieb Steen & Hamilton, to lead the effort."