Huffington Magazine Issue 33 | Page 70

OBAMA 2.O / FINANCIAL REFORM include getting that fifth SEC commissioner in place and making sure Commodity Futures Trading Commission Chairman Gary Gensler, the reformers’ favorite Wall Street regulator, gets another term after his current stint ends in 2013. The problem, though, is that even if you get good people in key positions, the agencies will be understaffed relative to the banks and lobbying firms they’re opposing. “The CFTC is radically underfunded,” said Stanley. “Their personnel count is roughly pretty similar to the mid-1990s, and Dodd-Frank has increased their workload by eight-fold.” Five: Loophole-Free Derivatives Regulation Perhaps even more important than fixing the problem of toobig-to-fail banks is making sure regulators can keep tabs on the exotic derivatives that contributed to the last crisis, from credit default swaps (CDS) to collateralized debt obligations (CDO) to CDOs stuffed with CDSs. Again, Dodd-Frank has rules for that, but banks are pushing hard for a way out. Republicans last year introduced HR 3283, the HUFFINGTON 01.27.13 Swap Jurisdiction Certainty Act, which would exempt overseas derivatives trades from Dodd-Frank rules as long as they were routed through a foreign subsidiary. The bill is in limbo, but it’s just one of many examples of banks tirelessly working to carve loop- “Part of the lobbying strategy is to wear you down, drag it out, until people get frustrated and lose confidence in regulators to do anything.” holes into obscure corners of the law dealing with obscure matters, where they can quietly make tons of money, while leaving the financial system at risk. If anything is certain in Obama’s second term, it is that this will continue. “Part of the lobbying strategy is to wear you down, drag it out, until people get frustrated and lose confidence in regulators to do anything and the pressure subsides,” said Bair. “That’s why it’s important that this stuff get done soon, not later, and as cleanly and effectively as possible. “You will never make this industry happy,” Bair warned of banks. “They will always want more.”