Factbox: Comments on derivatives bill, SEC Goldman suit

(BestGrowthStock) – Chairman Blanche Lincoln unveiled the Senate Agriculture Committee’s draft bill to regulate the $450 trillion over-the-counter derivatives market.

The draft legislation came on the same day the U.S. Securities and Exchange Commission charged Goldman Sachs with fraud for a credit derivative that it said cost investors more than $1 billion. The company said the charges were unfounded and it would fight them.

Here are comments from lawmakers and industry participants:

DEMOCRATIC SENATOR BLANCHE LINCOLN, ARKANSAS

“This is another example of how risky Wall Street behavior puts our nation’s financial system in peril and further illustrates the need for the strong reform that my legislation provides. My legislation reigns in this risky behavior by ending the days of backroom deals, providing 100 percent transparency to the derivatives market, putting an end to ‘too big to fail’ and preventing future bailouts.”

REPUBLICAN SENATOR MIKE JOHANNS, NEBRASKA

“The Europeans, Singapore, whoever, is looking at this and saying, ‘Holy smokes! We’re going to get all this new business. They’re not going to pass the identical laws we’ve passed.'”

“This is just the wrong strategy. I think it’s just a huge job-killer and a huge capital-killer for the United States.”

GARY GENSLER, CHAIRMAN, U.S. COMMODITY FUTURES TRADING COMMISSION

“Chairman Lincoln has released a strong bill that would establish essential protections for the American public.”

BART CHILTON, COMMISSIONER, U.S. COMMODITY FUTURES TRADING COMMISSION

“Our financial markets, like Apollo 13, have gotten into serious trouble, and while we have been able to navigate back from the brink, we are sorely in need of a strong hand to get us on solid ground. Chairman Lincoln’s over-the-counter derivatives bill, released today, goes a long way toward achieving that goal.”

“Too many people are out of work, and too many household budgets are strained by unfair prices, and Chairman Lincoln’s bill puts some necessary restraints and safeguards in place to ensure that consumers don’t pay the price for Wall Street excesses.”

“It’s really pretty simple. Failure is not an option.”

JAMES ELLMAN, PRESIDENT, SEACLIFF CAPITAL IN SAN FRANCISCO

“Banks were getting their mojo back, successfully fighting the regulatory reform bill that Obama’s got on the floor in the House and the Senate. Clearly such malfeasance could help get the bill to go through.”

JASON TYLER, SENIOR VICE PRESIDENT, INVESTMENT COMMITTEE, ARIEL CAPITAL MANAGEMENT

“The timing of this works out well to get some legislation done … it gives (lawmakers) another arrow in the quiver.”

“But I think usually when there’s a legislative change like this, it’s less game-changing than the initial headlines.”

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(Reporting by Jasmin Melvin, Clare Baldwin, Maria Aspan, Roberta Rampton, Charles Abbott and Christopher Doering; Editing by Lisa Shumaker)

Factbox: Comments on derivatives bill, SEC Goldman suit