M E M O R A N D U M
TO: Reporters and Editors
RE: Derivatives Bill Mark-Up in the Senate Ag Committee
DA: Wednesday, April 21, 2010
Senator Chuck Grassley today released the following statement after the Senate Agriculture Committee passed legislation that would create more transparency of the derivatives market. Grassley voted to pass the bill out of committee.
“I’m disappointed that the legislation presented for committee action was not bipartisan. The Chairman and Ranking Member had worked for months for a bipartisan bill, but politics thrown into the mix by the White House derailed that effort in the end. I hope the floor debate on a larger financial reform package is different, and that good policy is put ahead of politics.
“Even so, I voted for the Chairman’s derivatives bill today because I think transparency is the right policy. The draft isn’t perfect, and I want to fix the way a provision is written so that whistleblower protections are not weakened as a result, for example. But the Lincoln bill is an important step in the right direction for transparency and accountability in the derivatives market. The legislation also prohibits taxpayer dollars being used to bail out firms that have engaged in risky derivatives deals. This market grew dramatically in the years before the 2008 financial crisis, and in June 2008, the over-the-counter derivatives market was valued at $684 trillion. They were a major factor in the taxpayer bailout of AIG. And there is nothing in current law regarding the over-the-counter derivatives market.
“My vote for this important reform of the derivatives market doesn’t mean I’ll be able to support the larger financial reform bill on the Senate floor. The derivatives piece is significant, but that larger bill has a number of flaws that need to be resolved before I’d support it. Again, I hope the majority leadership of the Senate allows the kind of debate, negotiation and amendment process needed to make those kinds of changes so that representative government can work as it should.”