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State of Ohio (Clermont, Brown, Adams, Hamilton, Pike, Warren, Scioto Counties) May 4, 2010 Election
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Financial Regulation That Protects Taxpayers Not Wall Street

By Surya "Chili" Yalamanchili

Candidate for US Representative; District 2; Democratic Party

This information is provided by the candidate
For dramatic regulatory reform that brings back Glass-Steagall, limits leverage, and turns "too big to fail" into "too big to exist." We must put Main Street ahead of Wall Street to protect American taxpayers.
The financial sector is made up of large casinos masquerading as banks. They do this to get massive public taxpayer backing in the event something goes wrong. But when things are going well, they pay themselves billions of dollars in bonuses. Unlike other, more controversial policy issues, financial reform is stalled only because of the power of their lobbyists. Over the past two decades, this lobby has donated more money to both parties than other sector. However, if we do not rein them in, they will be back to finish the job they started in 2008.

  • Too big to fail = Too big to exist. The majority of the financial system is made up of massive institutions that are so interconnected that if one failed, it would trigger a wave of defaults that could bring down all firms. Given the complexity of the "financial innovation" in instruments that these firms use, effective regulation to wind down firms is not practical. We must limit their size so a single failure would be a flesh wound and not terminal.

  • Bring back Glass-Steagall Act. We must separate out the casino-like behavior of investment banking and trading from that of everyday banking. The latter is the lifeblood of our economy and deservers federal guarantees. However, the former should not be allowed to capitalize on essentially interest-free taxpayer money to make massive bets that are used to pay outlandish bonuses in a time of national crisis.

  • Limit leverage, regulate derivatives in transparent marketplace, and hold ratings agencies accountable. Banking interests were able to essentially write their own regulations since the late 90's. Naturally, they repealed and resisted the policies that safeguarded taxpayers at their expense.

If we fail to act now we are bound to repeat the financial collapse and crisis of 2008. We are currently in the familiar phase of privatizing the massive gains in the forms of billions in bonuses. But we must not allow the next phase of socializing trillions in their losses to occur again.

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