"Experts'...Fear: ...Dodd Bill Won't Stop..."Epidemic" of Wall Street Fraud"

[WhiskeyGirl]

The political jousting since Sen. Chris Dodd proposed new financial reforms on Monday seems at first to be just another Washington ideological rift...

After all, Senator Dodd proclaimed about the importance of his reform bill: "There hasn't been a financial reform on the scale that I'm proposing this afternoon since the 1930s." In truth, it's significantly weaker than the one he introduced last fall as he's fruitlessly sought Republican votes. And, it's worth noting, FDR's original reforms that reined in Wall Street and protected consumers were not filled with the sort of carve-outs for financial industries and traders that spent nearly $500 million in lobbying last year, money well spent when one considers the loophole-laden bills in the House and Senate (with the House bill having a more independent consumer agency.)

"This bill wouldn't have prevented the past crisis, and it won't prevent a future crisis," says William K. Black, an economics and law professor at the University of Missouri, Kansas City, and the former senior financial regulator who cracked down on the savings and loan industry in the 1980s. In a wide-ranging interview with Truthout, Black, joining other critics, raised alarms about assorted obscure bookkeeping ploys and outright scams that are laying the groundwork for the next meltdown. Moreover, the ongoing partisan tussling over financial reform and the independent consumer agency he supports are drawing attention away from the importance of getting the Obama administration to crack down on the corporate criminals now.

Black argued, "This is actually going to make it harder for us to take regulatory steps that are needed to reduce the risk of financial collapse." That may sound like an extreme claim, but Black argued that real enforcement is undermined by what he calls "window-dressing" reforms in the Dodd bill - like having a presidentially appointed head of the all-important New York Fed or, even riskier, having limited clearinghouses for often overvalued "derivatives,"  thus creating a dangerously false sense of security while free-wheeling trading with phony pricing continues. Derivatives are bets or investment vehicles supposedly based on underlying assets, and there's a good reason that Warren Buffet has called them "financial weapons of mass destruction."

"Let's jail the crooks and we don't have to wait for new legislation," he said.

    "We are troubled by the provisions that allow Consumer Financial Protection Agency decisions to be appealed to a council dominated by institutions that failed consumers in the past, and by holes in its enforcement authority. Derivatives, and other elements of the shadow markets must be clearly and effectively regulated, without exceptions or loopholes that undermine these rules, and we must put real measures in place to take on the menace of 'too big too fail' banks playing heads they win tails we lose games with our economy....

    "It has been well over a year since the Big Banks bought our economy to the edge of the abyss. It is far past time for action."

more here - http://www.truthout.org/experts-biggest-fear-new-dodd-bill-wont-stop-another-meltdown-epidemic-wall-street-fraud57760