The recent proposal by Senator Lincoln isn’t bad because it will cost banks, but because it is ignores how the OTCderivative markets function. Its pretty obvious from my comments I’m against most of what she’s proposed here. It feels as if she’s ignoring everything Congress has learned since early 2009, most of which came through in the House bill. Some excerpts:
“This is a back-door way to reinstate Glass-Steagall without actually doing so,” McPartland said.
“For the swap desk to be successful and continue providing the service they do, it’s important that they have bank capital behind them,” McPartland added.
More comments from Jamie Dimon, Senator Lincoln and myself at Reuters.com