AFL-CIO: Financial Reform Must Maintain Strong Rules on Risky Derivatives

Financial Reform Must Maintain Strong Rules on Risky Derivatives

by Mike Hall

House and Senate negotiators are expected today to put the finishing touches on a financial reform conference report that melds each chamber’s previously passed reform bills. AFL-CIO President Richard Trumka warned lawmakers today any move to weaken provisions governing derivatives would be “a gift to Wall Street.”

Derivatives are the complex and risky financial products developed by Wall Street and Big Banks that were at heart of the financial collapse. The Senate bill has tougher rules on derivatives than the House version. Trumka says the strong derivatives regulations in the Senate bill are


There have been reports that some of the changes Wall Street lobbyists have been pushing hard for include exempting hedge funds and insurance companies like AIG from the derivatives rules and weakening provisions that require Big Banks to spin off their risky derivatives operations into subsidiaries that are not protected by taxpayer-funded government insurance.

Trumka says that today’s expected action on the conference report on the fate of the derivatives rules is the chance to get financial reform right. But he says if Wall Street and Big Bank lobbyists win,