White House IDs 10 reforms targeted by Wall St

WASHINGTON, May 4 (BestGrowthStock) – The White House on Tuesday
published a list of financial reforms it means to defend
against Wall Street lobbyists in the Senate but omitted a tough
provision that has drawn criticism from prominent banking
regulators.

The provision, absent from a White House top-10 list of
measures targeted by Wall Street and its legislative allies,
would effectively require banks to spin off their lucrative
swaps desks as part of a crackdown on the $450 trillion
derivatives market.

In a blog posted on its official website, the White House
accused financial industry lobbyists of “working overtime” to
weaken consumer protection and dilute efforts to regulate
financial derivatives as part of the most sweeping overhaul of
banking rules since the Great Depression,

Banks, which reap huge profits in the derivatives market,
have attacked the swaps proposal. Federal Deposit Insurance
Corp Chairman Sheila Bair and Comptroller of the Currency John
Dugan have also expressed concern about the measure’s potential
impacts on government oversight and bank capital,
respectively.

Administration officials have remained silent on the
proposal and analysts say it will probably be dropped from the
bill as the Senate debates amendments over the next two weeks.

Financial reform is the Obama administration’s top
legislative agenda and Democrats hope to use public anger
toward Wall Street to drive reforms forward in Congress. The
reform issue could also help Democrats retain control of
Congress in the November elections.

Tuesday’s blog, authored by White House Communications
Director Dan Pfeiffer, predicted Wall Street lobbyists would
push the following “loopholes” as amendments to Senate
legislation now under consideration:

* Prevent the bill from giving state attorneys general the
authority to impose consumer financial protections on banks and
other financial institutions;

* Exempt auto dealers, department stores and other
providers of financial services from consumer protection
rules;

* Restrict funding for the proposed Bureau of Consumer
Financial Protection and limit the agency’s ability to
establish clear rules for the consumer financial marketplace;

* Take away the ability of state governments to add their
own additional protections to new federal consumer finance
rules;

* Eliminate a provision requiring financial derivatives to
be traded on exchanges or other electronic trading platforms;

* Apply a derivatives trading exemption meant for
nonfinancial companies to hedge funds and other financial
entities;

* Do away with a measure to designate large non-bank financial companies such as American International Group Inc
(AIG.N: ) for tougher supervision by the Federal Reserve;

* Protect insurance companies from provisions requiring
them to provide information to the U.S. Treasury Department;

* Do away with requirements that would make mortgage
companies retain a stake in the loans they sell or securitize;

* Make the federal government’s authority to shut down big
failing financial firms too complicated to work.

Stock Market Trading

(Reporting by David Morgan and Andy Sullivan, editing by
Gerald E. McCormick)

White House IDs 10 reforms targeted by Wall St