Thursday, Jul. 01, 2010
Derivatives Trader
Issue
The Senate bill required U.S. banks to spin off their derivatives-trading desks, a move that would have likely forced the new bank subsidiaries to raise $5 billion to $7 billion to back the trades, according to one analysis
Pressure
Lobbyists for the big banks fought back as part of a massive securities-industry effort that included more than 600 lobbyists and $28 million in billings in the first six months of 2010
Payoff
House and Senate leaders diluted the proposed rules. Banks can now keep most derivatives trading in-house, and new restrictions will not take effect for two years. Megabanks need to raise much less money, so taxpayers face a greater risk of more bailouts if the banks make bad bets