Lawmakers: Rule repeal lets BofA, other banks hold $10T in risky trades

By DEON ROBERTS - NOVEMBER 20, 2015

Two of Congress’ biggest Wall Street critics say last year’s rollback of a post-financial crisis regulation has allowed Bank of America and some other big banks to keep nearly $10 trillion in risky trades on their books, Bloomberg reports.

Last week, Democrats Sen. Elizabeth Warren and Rep. Elijah Cummings released their analysis of December’s partial repeal of a section of the 2010 Dodd-Frank financial overhaul law. The repeal, included in must-pass spending legislation, reversed a provision requiring banks to separate swaps trading from deposit-taking units.

A press release on Warren’s website says that, had it not been for the repeal, the roughly $10 trillion in swaps trades would be “pushed out” to entities not insured with taxpayer funds. Most of that amount is on the books of Bank of America, Citigroup and JPMorgan Chase & Co., Warren said in remarks on the Senate floor last week.

“Now, a few banks – a few too-big-to-fail banks – are going to keep another $10 trillion in risky business on their books,” Warren said.

~Snip~

Warren, a member of the Senate Committee on Banking, Housing, and Urban Affairs, said last week the financial services sector continues pushing for repeals of Dodd-Frank rules. One tactic the industry is using is to attach rollback measures to must-pass legislation, like highway and government-funding bills, Warren said.

“The lobbyists are swarming this place, she said on the Senate floor. “They want to roll back financial regulations, and they’re working every contact they can to attach these rollbacks to anything that moves.”

Read more here: http://www.charlotteobserver.com/news/business/banking/bank-watch-blog/article45532833.html#storylink=cpy