Investors Alarmed by Senate Interference with Dodd-Frank Rules on Derivatives
July 11th, 2013
Thirty-eight faith-based and socially responsible institutional investors sent a letter to Senators who recently asked Treasury Secretary Jacob Lew to delay the implementation of important Dodd-Frank derivatives regulations. The Rev. Seamus Finn, OMI (Missionary Oblates of Mary Immaculate, and Board Director, the Interfaith Center on Corporate Responsibility) organized the letter, which expressed dismay and disappointment at the Senators’ action.
It is vital that the over-the-counter derivatives market be regulated, and soon. Derivatives are complex financial instruments used to hedge risk, and were largely responsible for the 2008 financial crisis.
In the lead up to 2008, large financial institutions bought and sold trillions of dollars worth of over-the-counter derivative instruments linked to subprime mortgage securities, which instruments would trigger a payout in the event of default. “This particular type of OTC derivative, known as a credit default swap (CDS), fomented the mortgage crisis and subsequent credit and economic crisis by offering purported “insurance” to people investing in subprime securities. This insurance fueled excessive risk-taking, demand, and expansion of the subprime market.” (Ref.: The Role of Derivatives in the Financial Crisis, Univ. of MD website)
- A video tribute to Fr. Kennedy Katongo, OMI (1980-2016) September 22nd, 2016
- 36th General Chapter of the Missionary Oblates of Mary Immaculate Convening in Rome September 16th, 2016
- Remembering Fr. Kennedy Katongo, OMI September 15th, 2016
Latest Video & Audio
- Goodbye to Plastic Bags in Laredo Texas April 14th, 2015
- Mexican Migrant Children Forgotten at the Border January 22nd, 2015