9
How financial reform bill's taking shape
Senator Christopher Dodd (D-Conn.) makes remarks with Senate Majority Leader Harry Reid (D-Nev.) during a news conference about the financial reform bill inside the U.S. Capitol in Washington, D.C.
To view this content, Javascript must be enabled and Adobe Flash Player must be installed.
TEXT OF STORY
Tess Vigeland: Today, at long last, the Senate started wading through amendments to a bill that could become the most comprehensive restructuring of financial oversight since the Great Depression. After a two-week political standoff, Republicans last night voted to let the bill onto the Senate floor. There's a long way to go before we know exactly what the reforms might look like.
But Marketplace's John Dimsdale tells us how the bill is taking shape so far.
JOHN DIMSDALE: As of right now, Democrats have agreed to drop a $50 billion fund to unwind a failing bank. The bill does have a Consumer Financial Protection Agency. But opening the debate Republican Senator Richard Shelby said he'll try to amend a bill...
RICHARD SHELBY: That will create massive and intrusive new government bureaucracies, damage job creation, reduce private investment in productive projects, make risk management more difficult, and threaten our economy.
Republicans want to rein in the powers of the consumer protection agency to keep it from imposing onerous rules on small businesses, car dealers, and even doctors who extend credit to their patients.
Taylor Griffin with Hamilton Place Strategies says there's one office in the consumer agency that has too much authority.
TAYLOR GRIFFIN: The office of financial research would have access to vast swaths of consumer data, and there is concern that perhaps there's too much information belonging to consumers that's going to be in the hands of the government.
The bill regulates the trading of derivatives. But Republicans will try to get rid of the requirement that big banks spin off their derivative operations.
Nick Kalivas at MF Global says banks rely on those profits.
NICK KALIVAS: It could actually make some of these banks more risky because they don't have the diversified cash flow.
The bill's managers want to finish in two weeks. But they are already over 100 amendments and voting doesn't begin until Tuesday.
In Washington, I'm John Dimsdale for Marketplace.
Jonathan and Arthur, you guys hit it right on the head. This story, combined with the one-sided Health Reform bit last week (with the wailing surgeon bitching about the reform -- with NO counter points of view) is also making me think twice about continued listening and donating. If I wanted faux "news" from a one-sided conservative source I would watch Fox.
To Marc Holmes ... the Fox channel in Cambridge is 31.
I have long been a fan of the program, but I have been noticing a pretty serious political shift in recent months that has led me to hold some serious reservations. Case in point: John Dimsdale's astonishingly one-sided and poorly-sourced story on 4/29. The supposed slug was how the financial reform bill is "taking shape." Apparently the best way to see is to quote (without rebuttal) the ranking Republican on the banking committee (he doesn't like it! It will create massive and intrusive new bureaucracies!); Taylor Griffin, an industry flak (too much government power) and a banker (regulating derivatives will actually create MORE risk and bailouts! Huh?).
Come on, financial journalists of the 21st century. This isn't reporting -- it's hackery. Shameful, GOP-and-Wall-Street-talking-points hackery. CNBC, mabe. But Marketplace? I know you can do better.
Mr. Dimsdale report without challenge a serious misrepresentation by financial industry lobbying Taylor Griffin. The Office of Financial Research and the Consumer Financial Protection Agency are entirely separate parts of the financial regulatory reform bill currently before the Senate. The Office of Financial Research will collect information on the positions of large banks and other financial institutions, and on their trades with each other. The purpose is to provide an early warning system to help avoid a future catastrophic meltdown that followed the collapse of Lehman Brothers. The Office of Financial Research, with its focus on systemic, large-scale financial risk, would not have a mandate to dig into the personal accounts of consumers.
In any case, the federal government already has the authority to collect detail financial information on individuals, under the Republican-sponsored USA Patriot Act.
Mr. Dimsdale should know better. His listeners certainly deserve better.
Arthur A. Small, III
State College, PA
These regulations are about limiting the stupid from buying products they don't understand. The southern republican senator from Alabama is realisticly thinking about the future outcome of these regulations. Not to mention that he has more cars produced in his state than in Michigan. Alabama seems to be looking forward instead of wanting to place blame on the past. Maybe Marketplace should do a story on why industry in the country is moving south in droves. I will give you a clue - UNIONS- a great example of why regulating prices and salaries doesn't work.
I heard the report on financial reform featuring John Dimsdale as the reporter. I was horrified that the financial reform political contest was so distorted. Mr Dimsdale presented this story in a one-dimensional way befitting Fox News, not Marketplace. The story could have been written by financial lobbyists but certainly not by a responsible journalist. He does not mention that the $50 billion fund used to unwind failing big banks (beyond what the FDIC can handle) would have been paid for by levies on the very banks the feature was designed to protect. Indeed, the only economically efficient way to handle these unwindings is to have the cost borne by the banks themselves. The Republican opponents charge that this is a bailout fund and have filibustered in support of the status quo, which requires that the taxpayer remain responsible, as we have been to date. The sources cited in the report are a right-wing Southern Republican who has been staunchly opposed to fixing the current system; a public relations firm working for the financial industry; and an investment firm with an active public relations department. Dimsdale cite no disinterested economists in a story centering on economic reform. As a professor of economics, I often recommend that students listen to Marketplace as a source of dispassionate analysis of complex and controversial issues, but I will have to revise my recommendations in the future.
