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The so-called credit rating agencies are part of the scheme. Ones like Moody's, Standard & Poor's, Fitch and others bogusly assessing toxic securitizations and other financial alchemy in return for large fees and big profits. The House bill does nothing to correct this, the final Senate one not likely to either. Instead, they'll give enforcement power to the notoriously corrupt SEC, staffed with officials that move to high-paying industry jobs, so refrain from future slapping hands that may feed them.
Other House (and likely Senate) bill problems include:
-- failure to address "too-big-to-fail" (TBTF) institutions that are too big to exist;
-- numerous loopholes letting derivatives speculators game the system without regulatory restraining authority;
-- enacting no deterrent to securitization process abuses;
-- not reforming government-sponsored enterprises (GSE) like Fannie, Freddie, and others; and
-- letting bankers self-regulate by keeping the Fed in charge - the ultimate conflict of interest assuring no change in business as usual, just cover to paper over flawed policy.
If the final Senate bill resembles HR 4173 as appears likely, Wall Street shenanigans will be green-lighted. A future greater financial crisis is assured. Giant banks will get bigger. Trillions more in public wealth will be looted. Current financial reform debate will be revisited, but nothing will be resolved now or then unless grassroots outrage forces it.
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