New Dem Members Unveil Legislation to Reform Derivatives Trading
Today, members of the New Democrat Coalition Leadership and the Financial Services Task Force joined task force member Representative Michael E. McMahon to introduce a bill to increase transparency and regulatory requirements for the trading of derivatives. The Derivatives Trading Accountability and Disclosure Act of 2009, sponsored by Rep. McMahon, would increase regulation and reporting requirements placed on the derivatives market, while still allowing for customized and over-the-counter derivative trading. This legislation provides greater protection for American families, businesses and investors, while maintaining an active derivatives market that encourages investment, economic growth and job creation.
The New Dem Financial Services Task Force is committed to working with the President, Chairman Frank and the Financial Services Committee on both improving the regulation of the derivatives market, as well as all aspects of financial regulatory reform.
"New Dems will be at the forefront of regulatory reform efforts this Congress because we bring real-world experience to this complex and critical issue," said Congressman Joseph Crowley, Chair of the New Dems. "I applaud the great work of our Financial Services Task Force member Rep. McMahon for putting together legislation that will enact greater transparency and regulation of the derivatives market. The New Dems believe the time has come to reform of our derivatives market in order to protect our economy from irresponsible trading, while protecting the ability of American businesses to hedge their risk. New Dems look forward to continuing our collaboration with Congressional Leadership, particularly Financial Services Committee Chairman Barney Frank, and the Obama Administration to address this critical issue."
"This bill will provide thoughtful, comprehensive regulation of the derivatives market," said Congressman Michael E. McMahon, a member of the New Dem Financial Services Task Force. "Not that long ago, the mob mentality was to blame derivatives for the collapse of our economy and do away with the entire market. This approach completely ignored the benefits derivatives play in a multitude of businesses, let alone the massive job layoffs which would have resulted in my district, and New York City as a whole. Derivatives are complex, but we cannot ignore them any longer for that reason. Similarly, it would not be prudent to completely do away with them. It is critical that we finally get this right - there is an entire industry at stake, as well as the ability of companies from Wall Street to Main Street to hedge their risks in a complex marketplace. This bill is the first step in the right direction and I thank my fellow New Dems for their support and counsel on this bill."
"Bringing transparency to the derivatives market and ensuring that regulators have adequate information regarding firms' risk exposure is vital to ensuring a stable economy," said Congresswoman Melissa Bean Co-Chair of the New Dem Financial Services Task Force.
"This legislation will help ensure companies can manage risk in a way that helps stabilize their businesses, and in turn, the entire economy," said Congressman Jim Himes, Co-Chair of the New Dem Financial Services Task Force. "This type of thoughtful oversight will help prevent the next financial crisis."
"I commend Rep. McMahon for his leadership in drafting this important legislation. I support the Derivatives Trading Accountability and Disclosure Act because it will require derivatives to be regulated in a thoughtful way that increases transparency and efficiency, provides tough oversight, identifies and minimizes systemic risk, and will prevent fraud and market manipulation. Congress has a lot of work to do to close the gaps the financial crisis exposed last year, and this bill makes an important contribution to that effort," said Congressman Dennis Moore, a member of the New Dem Financial Services Task Force.