Financial lobbying: attacking public interest
According to Public Citizen, corporate lobbyists working on these issues have outnumbered pro-reform organisations by more than 11-to-1. Their clients include major banks, financial trade associations and the U.S. Chamber of Commerce.
At stake here are attempts to bring derivative trading more out into the open by requiring trades to be cleared through open exchanges or clearing houses. The traders don't like this degree of exposure, nor do they relish losing federal deposit insurance on their activities:
The Senate Wall Street reform bill includes relatively aggressive derivatives regulation approved by the Agriculture Committee. The current draft would push most derivatives trading onto open exchanges or clearinghouses, and would deny federal deposit insurance to derivatives traders. This latter requirement would force commercial banks to spin their derivatives trading operations off into independent companies, although they would be able to remain under the same holding company. Wall Street is lobbying furiously to eliminate or undermine these provisions.
Of course, the disparity of access to political influence is not restricted to Washington. Financial lobbyists in Brussels and London outnumber public interest reformers by similar ratios, and (like Washington) European political parties are highly dependent on banks, hedge funds and other financial institutions for their funding: not to mention the endless "special advisers" seconded to high-level politicians by the Big-4 accounting firms.
TJN encounters a similar disparity in its work on tax havens and tax reform. In terms of financial and personnel resources we are comprehensively outnumbered by lobbies representing the interests of a tiny elite. We would also add that the overwhelming volume of press coverage on these issues falls down on the side of the vested interests: o tempora o mores!
You can download the Public Citizen report here.