Sens.
Language prohibiting securities firms from creating asset-backed securities, selling them to clients and then betting against those same securities was a key part of the Merkley-Levin provisions included in the Dodd-Frank Act. Merkley-Levin also included language implementing the "Volcker Rule" to sharply limit risky trading by banks and investment firms for their own profit.
"Asset-backed securities play a critical role in financing mortgages, student loans, cars, credit cards, and more. But during the financial crisis, some firms constructed and sold toxic securities that were filled with bad assets, and sometimes even bet the securities would fail," said Levin. "Senator Merkley and I have worked to restore integrity and stability to those markets by prohibiting the conflicts of interest that spawned the abuses and helped fuel the crisis. We commend the
"You wouldn't hire an electrician to rewire your house if you knew that person took out fire insurance against your property. Financial institutions that are supposed to represent the interests of their customers shouldn't be able to bet against them. Strong measures to end damaging conflicts of interest are essential in making sure customers are treated fairly," said Merkley.
The senators' letter to the
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Copyright: | (c) 2012 Targeted News Service |
Source: | Targeted News Service |
Wordcount: | 310 |
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