U.S. Sen. Bob Corker, R-Tenn., today criticized both Republicans and Democrats for “a silly debate” over regulating Wall Street in the financial reform bill moving through Congress.
The Democratic-backed bill approved last month by the Senate Banking Committee doesn’t threaten Wall Street as much as it does community banks and businesses needing loans, Sen. Corker said.
“To act like this (financial reform bill) is tough on Wall Street is laughable,” said Sen. Corker, who has been a key negotiator in trying to draft a reform plan with Senate Banking Committee Chairman Chris Dodd, D-Conn. “To say you are either with me and against Wall Street or you are against me and for Wall Street is just a silly debate and one that is beneath the topic.”
President Obama plans to travel to New York City on Thursday to deliver a speech critical of the way Wall Street acted leading up to the recent financial melt down. But Sen. Corker said he thinks Wall Street will likely welcome what the administration is proposing in the latest financial reform package.
“I’m sure they will be hoisting (Obama) on their shoulders once this bill passes,” he told MSNBC in an interview this morning.
The reform plan will add more transparency to financial derivatives to help ensure there is an appropriate market and adequate backing for such instruments. But the clearing houses for such exchanges will still likely be owned by Wall Street.
“All you are doing is strengthening their plumbing,” Mr. Corker told the Times Free Press today.
Mr. Corker also said some Republicans have overstated the potential of a Wall Street bailout from the proposed financial reforms, noting that the measure does provide for an orderly liquidation of major firms to avoid the problem of companies being too big to fail.
“This has been a silly debate about silly things,” he said. “When this bill passes, the only thing that is going to happen is that the large firms that already exist are going to get larger.”
Mr. Corker said he is disappointed that the financial reform bill approved on a partisan vote in the Senate Banking Committee last month doesn’t require Wall Street firms to honor the representations and warranties they make to investors regarding mortgage backed securities. The measure also doesn’t address problems with the initial underwriting of loans, which Mr. Corker said is key to any reform plan. Mr. Corker said private equity funds and hedge funds also are left out of the bill.
“I’m not happy with the rhetoric on the Republican side or the rhetoric on the Democratic side,” he said. “What we need to do is finish working on this bill, not to harm someone, but to put in place he mechanisms to make sure we have more transparency and a better system and avoid the kind of problems we had over the past few years.”