Remember the Omnibus bill passed to prevent the government from shutting down in 2014? Remember and the last minute amendment that removed protections from consumers giving Wall Street the right to carry out the risk taking of derivatives? The annual bailout of banks? Remember that?
I figured out how and why the banks came up with that idea. They basically pouted that ordinary citizens can declare gambling losses above any winnings. Banks are citizens, too, aren't they.
Ah, but, what has this to do with TRIA? I should be reading the definitions by now, right?
By Danny Vinik
...On Thursday afternoon, (click here) the Senate overwhelmingly passed legislation to renew the Terrorism Risk Insurance Act (TRIA), which expired at the end of 2014 and allows the federal government to backstop commercial insurance companies up to $200 million in the case of a terrorist attack. But the bill, which the House passed on Wednesday, also eliminates another provision in the financial regulatory bill. Wall Street’s strategy to dismantle Dodd-Frank is only picking up speed.
The regulation that TRIA rolls back is not pivotal to Dodd-Frank. It gives the Securities and Exchange Commission (SEC) and Commodities Future Trading Commission (CFTC) oversight over collateral and margin requirements for certain financial trades—known as derivatives—with commercial end users. It’s not as important to Dodd-Frank as Section 716, which prevented banks from using taxpayer-backed money to trade in certain high risk financial products and was eliminated in the year-end funding bill known as the CROmnibus. But it still weakens the law. “The oversight of margin and collateral for derivatives transactions is a basic regulatory safeguard,” Americans for Financial Reform wrote in an open letter opposing the provision. “Even though regulators have not proposed to require any margin of commercial end users at this time, it is inappropriate to completely eliminate the ability of central derivatives market regulators to take action in this important area.”...
I figured out how and why the banks came up with that idea. They basically pouted that ordinary citizens can declare gambling losses above any winnings. Banks are citizens, too, aren't they.
Ah, but, what has this to do with TRIA? I should be reading the definitions by now, right?
By Danny Vinik
...On Thursday afternoon, (click here) the Senate overwhelmingly passed legislation to renew the Terrorism Risk Insurance Act (TRIA), which expired at the end of 2014 and allows the federal government to backstop commercial insurance companies up to $200 million in the case of a terrorist attack. But the bill, which the House passed on Wednesday, also eliminates another provision in the financial regulatory bill. Wall Street’s strategy to dismantle Dodd-Frank is only picking up speed.
The regulation that TRIA rolls back is not pivotal to Dodd-Frank. It gives the Securities and Exchange Commission (SEC) and Commodities Future Trading Commission (CFTC) oversight over collateral and margin requirements for certain financial trades—known as derivatives—with commercial end users. It’s not as important to Dodd-Frank as Section 716, which prevented banks from using taxpayer-backed money to trade in certain high risk financial products and was eliminated in the year-end funding bill known as the CROmnibus. But it still weakens the law. “The oversight of margin and collateral for derivatives transactions is a basic regulatory safeguard,” Americans for Financial Reform wrote in an open letter opposing the provision. “Even though regulators have not proposed to require any margin of commercial end users at this time, it is inappropriate to completely eliminate the ability of central derivatives market regulators to take action in this important area.”...
