According to Bloomberg, the original draft of Barney Frank’s derivatives legislation:
would have given the Securities and Exchange Commission and Commodity Futures Trading Commission joint authority to “prohibit transactions in any swap” that they determine “would be detrimental to the stability of a financial market or of participants in a financial market.”
Frank has now stripped that provision because it would be “unsettling”:
“There was concern that a broad grant to ban abusive swaps would be unsettling,” Frank, chairman of the House Financial Services Committee, said today as the panel began action on his measure.
Unsettling to the economy?
Unsettling to the 5 banks which comprise the lion’s share of the derivatives business.
Frank’s revised bill fails to address the many concerns raised by the head of the CFTC (see this and this), and really does nothing to fundamentally reign in the credit derivatives which were largely responsible for crashing the economy.
Nope, nothing but hot air.