November 15, 2010
Congress and the President passed important legislation that will reform Wall Street in The Wall Street Reform and Consumer Protection Act, HR4173. This law was passed to ensure that Wall Street acts in a transparent and accountable manner especially the derivatives market. As the Wall Street Reform Act passes through the rulemaking process please ensure that the intent of the law is not watered down when the regulations are written. America cannot afford another economic debacle perpetuated by Wall Street and its reckless behaviors.
The clearinghouses created by the Wall Street Reform Act are to act as independent bodies that will monitor the derivates market to ensure both accountability and transparency. These clearinghouses must remain independent from the ownership control of Big Banks and Hedge Funds. The independence of the clearinghouses could be greatly undermined by the inclusion of the proposed 5% Rule, which would allow 11 banks to gain control of every clearinghouse. Implementation of the 5% Rule will undermine the intent and spirit of the Wall Street Reform Act.
The intent and spirit of the Wall Street Reform Act is found within the proposed 20/40 Rule. The 20/40 Rule will limit the ownership of the clearinghouses by the Big Banks to 40% overall, ensuring that the clearinghouses can truly act independently and monitor the derivatives market. Please dont allow a repeat of the financial debacle created by the Big Banks and Hedge Funds through their manipulation of the derivative market. Ensure that the derivatives market is monitored by independent clearinghouses, which are not owned and operated by the Big Banks. Uphold the 20/40 Rule and get rid of the 5% Rule being lobbied by the Big Banks.