Five of the nation's largest commercial banks stand to earn $35 billion on derivatives contracts this year -- but only if they get their way. To ensure that federal legislation won't kill their chance of collecting that cash, they've been meeting with lawmakers and their staffers, according to Bloomberg.
The U.S. banks are pouring money into campaign contributions and lobbying efforts -- and the total that could bring in by fending off a bill to regulate derivatives trading is 358 times more than what they've spent on politicking since the start of the 2008 election cycle.
(Don't know what derivatives are? Check our Merriam-Webster's definition.)
Together, JPMorgan Chase & Co., Goldman Sachs, Bank of America, Morgan StanleyCitigroup have spent $97.8 million on lobbying and campaign contributions (including donations from both the employees and political action committees of these companies) since 2007.
As five of the all-time top donors, these companies have strong financial ties to Congress. Perhaps it's no wonder, then, that the derivatives market hasn't faced much (if any) regulation during its 30 years of existence. These banks have also supported the party now in power, giving Democrats 63 percent of their total campaign contributions since the start of the 2008 election cycle.
In addition, all but Bank of America was among the top donors to President Barack Obama's presidential campaign in the 2008 election cycle. The employees and PAC of Goldman Sachs gave Obama more than all organizations but the University of California system at $994,800.
Regardless, the Obama administration last month announced a plan to regulate derivatives trading, specifically something called the over-the-counter derivatives market. Bloomberg explains: "The so-called OTC market consists of privately negotiated contracts that enable companies or investors to hedge against or bet on swings in the value of bonds, interest rates, currencies, commodities or stocks. Unlike exchanges, the business is unregulated and prices aren't public."
Although commercial banks and the securities and investment industry have been successful at thwarting regulation in the past, they might have a harder time now, as the trading of unregulated derivatives has been targeted as one cause of the current economic mess. And despite the tough economic times, some of the banks are still clearly willing to spend their cash on influencing politics, especially when it could affect their bottom line.
Since the start of the 2008 election cycle, commercial banks have spent $116.3 million on lobbying and given $40.7 million in campaign contributions. The securities and investment industry has spent $226.9 million on lobbying and given $170.6 million to candidates and party committees.
While the PACs and employees of securities and investment companies have given 58 percent of their total contributions to Democrats in that time, commercial banks are a little more evenly divided, donating 52 percent to the GOP.
And the banks aren't alone in this battle. According to Bloomberg, the U.S. Chamber of Commerce, which is a lobbying powerhouse, sent representatives to Capitol Hill over the summer recess to explain to legislative staffers that "some proposals would make it very difficult for many companies to use over-the-counter derivatives to manage the risks of their day-to-day business."
To have a friend in the Chamber is no small achievement. The Chamber of Commerce spares no expense where lobbying is concerned, and it is the lobbying powerhouse at the federal level, spending more on influencing politics than any other single special interest group. So far this year, it has spent $26.2 million.
Other, more unlikely allies have come forward, too.
When employees from the Chamber of Commerce met with staffers, they brought along representatives from Devon Energy and Cargill. Regulation could make it harder for these two companies, like many others, "to use over-the-counter derivatives to manage the risks of their day-to-day business," Jason Matthews, the Chamber's lead lobbyist on financial-services issues, wrote in his invitation to staffers, according to Bloomberg.
Since the start of 2007, Cargill and Devon Energy combined have spent $4.9 million on lobbying.
and
The U.S. banks are pouring money into campaign contributions and lobbying efforts -- and the total that could bring in by fending off a bill to regulate derivatives trading is 358 times more than what they've spent on politicking since the start of the 2008 election cycle.
(Don't know what derivatives are? Check our Merriam-Webster's definition.)
Together, JPMorgan Chase & Co., Goldman Sachs, Bank of America, Morgan StanleyCitigroup have spent $97.8 million on lobbying and campaign contributions (including donations from both the employees and political action committees of these companies) since 2007.
As five of the all-time top donors, these companies have strong financial ties to Congress. Perhaps it's no wonder, then, that the derivatives market hasn't faced much (if any) regulation during its 30 years of existence. These banks have also supported the party now in power, giving Democrats 63 percent of their total campaign contributions since the start of the 2008 election cycle.
In addition, all but Bank of America was among the top donors to President Barack Obama's presidential campaign in the 2008 election cycle. The employees and PAC of Goldman Sachs gave Obama more than all organizations but the University of California system at $994,800.
Regardless, the Obama administration last month announced a plan to regulate derivatives trading, specifically something called the over-the-counter derivatives market. Bloomberg explains: "The so-called OTC market consists of privately negotiated contracts that enable companies or investors to hedge against or bet on swings in the value of bonds, interest rates, currencies, commodities or stocks. Unlike exchanges, the business is unregulated and prices aren't public."
Although commercial banks and the securities and investment industry have been successful at thwarting regulation in the past, they might have a harder time now, as the trading of unregulated derivatives has been targeted as one cause of the current economic mess. And despite the tough economic times, some of the banks are still clearly willing to spend their cash on influencing politics, especially when it could affect their bottom line.
Since the start of the 2008 election cycle, commercial banks have spent $116.3 million on lobbying and given $40.7 million in campaign contributions. The securities and investment industry has spent $226.9 million on lobbying and given $170.6 million to candidates and party committees.
While the PACs and employees of securities and investment companies have given 58 percent of their total contributions to Democrats in that time, commercial banks are a little more evenly divided, donating 52 percent to the GOP.
And the banks aren't alone in this battle. According to Bloomberg, the U.S. Chamber of Commerce, which is a lobbying powerhouse, sent representatives to Capitol Hill over the summer recess to explain to legislative staffers that "some proposals would make it very difficult for many companies to use over-the-counter derivatives to manage the risks of their day-to-day business."
To have a friend in the Chamber is no small achievement. The Chamber of Commerce spares no expense where lobbying is concerned, and it is the lobbying powerhouse at the federal level, spending more on influencing politics than any other single special interest group. So far this year, it has spent $26.2 million.
Other, more unlikely allies have come forward, too.
When employees from the Chamber of Commerce met with staffers, they brought along representatives from Devon Energy and Cargill. Regulation could make it harder for these two companies, like many others, "to use over-the-counter derivatives to manage the risks of their day-to-day business," Jason Matthews, the Chamber's lead lobbyist on financial-services issues, wrote in his invitation to staffers, according to Bloomberg.
Since the start of 2007, Cargill and Devon Energy combined have spent $4.9 million on lobbying.
and
