6 Things Worth Fighting For In The Senate Financial Reform Bill: The Roosevelt Institute (PHOTOS)

As the Senate heads into tough negotiations over a historic set of financial reforms, the Roosevelt Institute has put together a crucial set of guidelines to the evolving debate.

Mike Konczal, whose blog is a must-read for anyone looking to get a handle on the arcana of financial reform, provided this list of six key causes still worth fighting for in the bill. (Check out his full report at the Roosevelt Institute's New Deal 2.0 blog here.)

While it's certainly wishful thinking that all of the forward-thinking amendments Konczal points out will be passed, keep in mind the negotiations are still ongoing. Check out the six key factors to financial reform below:

(For more of the latest analysis on financial reform, visit the Roosevelt Institute's blog New Deal 2.0.)

(Nathaniel Cahners Hindman contributed to this report.)

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Senators Brown, Kaufman, Casey, and Whitehouse’s Safe Banking Act of 2010 would impose a rule that a bank's liabilities cannot exceed 3% of US GDP, says the Roosevelt Institute's report. Currently, the biggest banks are able to borrow money from the Fed's discount window at near-zero rates, amounting to a subsidy to big banks of as much as $34 billion a year, according to a recent report by the Center for Economic and Policy Research.

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Senators Brown, Kaufman, Casey, and Whitehouse’s Safe Banking Act of 2010 would impose a rule that a bank's liabilities cannot exceed 3% of US GDP, says the Roosevelt Institute's report. Currently, the biggest banks are able to borrow money from the Fed's discount window at near-zero rates, amounting to a subsidy to big banks of as much as $34 billion a year, according to a recent report by the Center for Economic and Policy Research.

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Things To Fight For In Financial Reform

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Comments

[mhburton]

01:01 AM on 05/19/2010

In addition, institute a 1% Tax on each High Frequency Trade to shut down the fleecing of regular investors by Goldman-Sachs & JPM, et al's, Cray supercomputers which, by the way, posted no losing days last quarter making as much as $100 million per day. Mathematically impossible unless there is some serious front running hanky-panky going on in those glass towers. Goldman, sure didn't want to talk much about the software that they claimed was ripped off last year. They said it could be abused if in the wrong hands. I contend that it is already in the wrong hands..Goldman's!

Reinstate the uptick rule for short selling and provide criminal penalties for Naked Short sales of stocks, futures, and options with proof you actually have the securities to back the short sales to be provided before the transaction begins.

Most important of all -- Close the Federal Reserve System down. Congress and the Treasury have the authority to print their own money without going through the Fed, buying bonds and paying the Fed Interest on our own money. Kennedy tried doing that with the "United States Note" just before he was killed. (Look them up. US Notes had Red Ink Serial numbers and Seals instead of the Green Ink Federal Reserve Notes) Maybe that is why he was killed??

[mhburton]

01:01 AM on 05/19/2010

Instead of a bunch of these new reforms, just reinstate the Glass-Steagal Act and split up commercial and Investment banks as they always should have been. Also outlaw Credit Default Swaps with criminal penalties for both seller and purchaser unless the purchasers of the swaps actually have an interest in the institutions the swaps cover. Then only allow the swap to cover for the possible loss in said interest and no more, like house insurance. The more profit someone stands to make from an entity's failure, the more incentive to "help" it fail by using naked short sales, etc.. (CDS's need to be banned worldwide, just ask Germany)

(CDS's sold by "bucket shops" were illegal for 70 years before they were allowed again in the 1999 Investment Reform Act and are a large part of what caused the crash of 1929 and most of what caused our current predicament.) CDS's are what are taking down the Euro right now and will be what takes down the US Dollar and the United States as soon as they have finished destroying Greece, Ireland, Spain, etc.

[PoorRichardsHeartache]

12:32 AM on 04/26/2010

we should stop wasting time on regulatory reform. The house and senate are bought and paid for. The Treasury guys bump into their buddies as they all have a good laugh. The only thing that will result from this is a rearrangement of the deck chairs painted a new color. These guys love complexity because it allows easy escape and loopholes. What a tragic joke!

[gfs5541]

09:35 AM on 04/29/2010

Yeah, yeah. And which big bank paid you to type your comments?

[Doug Compagner]

03:02 PM on 04/25/2010

Fannie,Freddie, and Barney should not get special treatment...they should be treated just like every other lending establishment.

[artgurrl]

02:36 PM on 04/29/2010

I laugh whenever I see a rightie rag on Fannie, Freddie and Barney. It proves to me time and again that they really don't understand how Fannie or Freddie work and it proves they are clueless as to what Barnie has done in congress. It also proves to me that that they don't understand that Bush did nothing to prevent this either. It's hilarious trying to debate with someone who doesn't understand the facts. Kind of like arguing with Barnie the purple dinosaur.

[senorlou]

12:51 PM on 04/25/2010

Hey, if you ever want to see a "free market" in action, try any failed state in the third world. Enjoy!

[Longtimeliberal]

05:52 PM on 04/24/2010

Thank God for a few good Senator's and lets hope they will prevail.

[Ken Maddox]

04:07 PM on 04/24/2010

What most people never stop to think about or to realize: The ultimate goal of a free market capital market is for all entities be consumed one by one until only one remains. There can be no other outcome if left unfettered, unregulated, and unlimited. Government must protect its citizens by strict regulation, size limits, oversight, and transparency.

[stabobaz]

01:01 AM on 05/19/2010

Let's find out. We the people have been most prosperous with smaller government regulation.

[David de Jong]

10:27 AM on 04/24/2010

Aninteresting proposal from the Chairman of Chinas central bank.

"We should strengthen supervision of over-the-counter derivatives markets; because the development level of each country's derivatives market is different, we should implement unified management standards," the statement quoted him as saying."

Of course, all this proves is that progressives calling for action are just communists.

[Furby2]

01:28 PM on 04/24/2010

China must be doing something right, they own the US economy. All the Chinese are saying is that all countries should be playing by the same set of derivatives regulations. Besides, after the recent bailouts it's official, the US is now a socialist country where taxpayers have to pay for big corporations' mistakes but don't get to participate in the profits. You can't really blame progressives for that mess unless of course you think Blankfein is a progressive.

[xlntcat]

02:26 PM on 04/24/2010

China had boat loads of money when the economy collapsed versus boat loads of debt, they rebounded sooner and didn't have to mess around with the idiots in the U S Congress who were for the most part financially illiterate. Bush bailed out the banks and propped up the auto industry. Now it was the right thing to do. Geithner has recoved most of the first segment of funds given out by the Bush administration and never even dispersed over $200 billion of the second half. As of today it appears possible that the tax payer could even make a little money on the bailouts over time but the President has requested that Congress make it impossible to lose money by charging the Big Banks for any loses.

[muziker]

06:16 PM on 04/24/2010

Bush sold the US to China. Check the records.

[Kevin Atlanta]

08:32 AM on 04/24/2010

The Chris Dodd Corporate Communist Collusion and Cooperation Act of 2010 doesn't do enough.
Audit and END the FED
Break up the Too Big To Fail NOW.
End all campaign contributions (bribes from the lobbyists too).
Make the people behind paper people be responsible for their actions, expose them to the light of day and demonstrate liberty and justice for all.
Turn pinstripes to prison stripes now.
Bring the War Criminals to trial too.

[PhilipTaylor]

02:57 AM on 04/24/2010

50,000 POLICE OFFICERS WORKED FOR CLINTON AND 50,000 AGENTS CAN WORK FOR THIS CRIME WAVE!

Krugman identified four investment banks structured to evade all regulations and were cause of financial meltdown: GS, LEH, M0RGAN, MERRILL.

CRISIS OF DEREGULATED REGULATORS UNDER BUSH: REGULATORS ON VACATION

1. SEC - 23 PEOPLE FOR WALL STREET?
2. FTC
3. FDIC
4. The Senate and House Committees on Banking
5. FED
6. FBI
7. US Attorney General
8. State Regulators - NEUTERED

BEEF UP WHAT WE HAVE with 50,000 Specially Trained White-Collar Crime Investigators!

Send $5 Billion/ Year to STOP LOSSES OF $TRILLIONS/YEAR

1. What both parties should be talking about is how many special investigators we should hire to investigate Wall Street and expose all the fraud and participants.
2. Special investigators investigating those in government who "turned a blind eye" and those who "ordered" turning a blind eye regardless of who they are.
3. Investigate accounting methods used that allowed "off balance sheet" fraud. "Creative" accounting is fraud and those regulators who allow it or turn a blind eye to it are guilty of conspiracy to commit fraud.
4. Investigate organized crime under RICO.

This is a battle for truth and the pursuit of justice and the SAVING OF AMERICA!

[vino22]

03:05 AM on 04/24/2010

What about Fannie and Freddie

[StJames]

09:14 AM on 04/24/2010

Fannie & Freddie were victims not perps. They bought the securities these jerks put together.

They were guilty of stupidity which is not a criminal offense. They definitely need an overhaul
but they are not in the same league as the big banks.

[pattithepolitico]

10:15 AM on 04/29/2010

Get the lawyers out of the SEC. Put in people who know the financial system.

[stabobaz]

01:03 AM on 05/19/2010

Let them spend the next ten years only repealing laws that have proven as costly with no benefit. No new laws.

[spinns17]

02:36 AM on 04/24/2010

time to sweep the streets .wall street must pay for there wrongs

[Carolab]

01:26 AM on 04/24/2010

Now, finally, the moment I along with millions of others have been waiting for. A COP finally stopping a Wall Streeter and gave them a citation. This action by itself is not as important as is the fact that it could and should lead to many more investigations of fraud and wrong doing.

But instead of Washington talking about sending out the DUI squad, the talk seems to be about retraining and re educating the COPS we already have and maybe even adding some new ones (Financial Reform?).

Excuse me if I seem a little confused here, but don't we already have a police system in place to oversee and regulate our banks? Are not the SEC, FTC, FDIC, The Senate and House Committees on Banking, The Federal Reserve the FBI and the U.S. Attorney General already in place to oversee, regulate and take action ? Had they done their jobs in the first place maybe we would not be in as much trouble as we are in now. Where were they? Who handcuffed them? Inquiring minds want to know.

Obama is using the SEC charge against Goldman to push for his agenda which the Republicans are opposing. I've got news for both [parties]. We don't need more legislation we need enforcement of the legislation and laws we already have. This is not a political battle nor one either side should claim a victory in. This is no more than seeking out truth and justice.

http://barackobama666com.blogspot.com/

[Carolab]

01:28 AM on 04/24/2010

Cont'd.

What both parties should be talking about is how many special investigators we should hire to investigate Wall Street and expose all the fraud and participants. In addition, we should have special investigators investigating those in government who "turned a blind eye" and those who "ordered" turning a blind eye regardless of who they are. The implications of cleaning house in this manner could be greater then Watergate or the Iran/Contra Affair. It is time to come clean not to cover up. Fear no longer works against us as we are growing smarter and stronger as a people.

Both parties should be asking why accounting methods used were allowed or "not noticed". use of "off balance sheet" items seems fraudulent. Off balance sheet accounting defies basic accounting principals. The use of "creative" accounting is fraud and those regulators who allow it or turn a blind eye to it are guilty of conspiracy to commit fraud. Having allowed these actions over the years should be looked at as organized crime under RICO.

This is not a political battle with political opportunities. This is a battle for truth and the pursuit of justice. Justice belongs to no political party. I say give up the politics. To both parties I say holster the guns you are pointing at each other and walk together as a unified force of justice protecting those you have sworn to defend...the American people. The winners here need to be the American people.

[Prakosh]

02:32 AM on 04/24/2010

Read Paul Krugman's, "The Return Of Depression Era Economics" (2006). In the book he identifies four banks that were structured to completely evade all regulations and according to Krugman these banks were at the center of the financial meltdown and since their deposits were not insured, and they were beyond the arm of regulation when they went down all their money was lost.

Claiming that no new regulations are needed is to pretend that everything is OK. But it isn't. Indeed, one of the biggest problems isn't so many regulations but the fact that once the new regulations are instituted the banks and their lawyers will be doing the same thing with this bill as the health insurance companies are doing with the Health care plan, that is going over it with magnifying glasses looking for loopholes.

And there may still be new institutions that will open and try to circumvent regulations all together.

[TimHS]

12:11 PM on 04/24/2010

I agree completely. Now if only we can get the people in charge on board.

[muziker]

06:20 PM on 04/24/2010

Before we can enforce the rules and regulations, we MUST put them back into place after Bush tossed them out.

[pattithepolitico]

10:17 AM on 04/29/2010

You mean after Reagan, Bush, Clinton and Bush tossed them out! It started a while back and has slowly progressed.

[Gmoney1]

12:47 AM on 04/24/2010

poor Obama - everybody wants him to right everything that was done over the last twenty-eight years in one year -

[hibeam]

02:21 AM on 04/24/2010

And he can only make it ten times worse. Welcome to Obamaland.

[Prakosh]

02:36 AM on 04/24/2010

He could take a cue from the Republicans and just say "No" to everything and leave the White House just like he found it, Only the problems will actually be worse since nothing will have been done to allevate them.

[Gmoney1]

11:06 AM on 04/24/2010

so far he's done a superb job - inspite of those slobbering rethugs - welcome to the real world -

[TimHS]

12:33 AM on 04/24/2010

No one has the talent, the time, or the money to become a doctor and a lawyer and an engineer and an accountant and a broker and…etc. That is why professions have licensing and regulating agencies. This is just one of the reasons we create a government. When we go to the doctor and see a wall of diplomas and licenses we can be reasonably confident that we at least have the potential to receive real health care. We don’t let just anyone set up shop as a doctor and let the free market decide which one is successful and which one isn’t. Financial organizations that can wipe out trillions of dollars worth of pensions, and then guiltlessly walk away, are run by high-functioning sociopaths who need watching. We need laws that fill the void in their moral principles with the fear of prosecution. We need to create an atmosphere where the honest on Wall Street prosper and the dishonest are gone. Reasonable regulation and strong enforcement is the only possible compromise between an out of control financial free market and a completely controlled market. No matter how many points you have in your bill if it doesn’t stop the financial cycle that has repeated for decades…then what’s the point? It is insane to continue to do things the same way and expect different results. Of course on Wall Street and for those who made billions from the collapse the same results are desirable, over, over, and over again.

[inzailings]

11:44 PM on 04/23/2010

Why is the Dodd bill gospel? Elisabeth Warren and Paul Volker S/B writing this bill. If this bill gets watered down, then you know we can;t trust Washington for anything. This will be the real test to see if main street will ever have a fair chance.