US Treasury plan shields Wall Street speculators

News Type: Event — Seeded on Tue Apr 1, 2008 8:10 AM EDT

Article Source: World Socialist Web Site

us-news, wall-street, recession, financial-crisis, us-economy, credit-crunch, henry-paulson, financial-markets, bear-stearns, the-fed, banking-crisis, government-regulation

Seeded by greenpagan

The WSWS reports: US Treasury Secretary Henry Paulson on Monday presented a broad plan to revamp the American financial regulatory system. The proposal, while giving the Federal Reserve Board expanded trouble-shooting powers over financial markets and institutions, would actually weaken federal oversight of Wall Street investment banks and leave virtually untouched the vast, unregulated secondary, or "derivatives," markets.

Speaking barely two weeks after the Fed intervened to prevent the bankruptcy of the investment bank Bear Stearns and announced massive loans to other Wall Street firms to avert a meltdown of the financial system, Paulson's "Blueprint for Financial Regulatory Reform" underscores the determination of the most powerful sections of the financial establishment to block any measures that would limit their ability to generate profits and multi-million-dollar compensation packages from various forms of financial speculation.

Paulson largely cast the proposal as a response to the bursting of the US housing bubble and the subprime mortgage crisis that have resulted in tens of billions of dollars in losses for major banks and a crisis of confidence in the entire US credit system. In fact, his department began drafting the plan last spring as a proposal to further deregulate the American financial system and make it even more profitable and more competitive against foreign rivals in Europe and elsewhere.

Paulson, a former Nixon aide and Wall Street executive, has long advocated further moves to limit government regulation of the banks and financial houses.

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{"commentId":1643036,"authorDomain":"greenpagan"}

greenpagan

It's the Hoover Administration in its final days all over again. Dems and their allies should just sit back and watch Bush's House of Cards collapse and be blown away by the wind.

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2 votes

#1 - Tue Apr 1, 2008 8:13 AM EDT

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Wall Street Awaits Government Plan	Associated Press	Sun Mar 30	1
US plans biggest finance system overhaul since 1930s	BBC News	Mon Mar 31	0
Paulson Backs Regulatory Overhaul, Broader Fed Role	Bloomberg.com	Mon Mar 31	0
Analysis: System Overhaul Faces Hurdles	Associated Press	Tue Apr 1	0
IBD Editorial: Paulson's Plans. March 31, 2008 4:20 PM PT	Investor's Business Daily	Mon Mar 31	1

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US Treasury plan shields Wall Street speculators

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