Thursday, 22 July 2010

Financial Reform Bill

Last week the US Senate passed the Financial Reform Bill. After decades of Neoliberal deregulation, the legislation intends to re-regulate the free-floating financial system which was at the root of the 2008 crisis. Symbolically, therefore, the bill signals the end of the postmodern (late-capitalist) years of unbridled lending and unfettered trading. As CNN Money aptly summarises, the legislation:

‘… establishes a Consumer Financial Protection Bureau that could write new rules to protect consumers from unfair or abusive practices in mortgages and credit cards; …creates a new council of regulators that would set new standards for how much cash banks must keep on hand to prevent them from ever triggering a financial crisis; …puts new limits on Wall Street banks' speculative bets for their own accounts and their ability to own hedge funds; …aims to shine a brighter light on some complex financial products, called derivatives, that are blamed for exacerbating the collapse of financial;…and inserts a middleman between trades, so that financial firms are less interconnected, to prevent the domino effect of financial firm failures in 2008.’

According to President Obama – and most, if not all, commentators tend to agree - the bill is ‘the toughest financial reform since the Great Depression.’ Still, however, as the NY Times writes, ‘the financial industry won some important victories, even if they face significantly heightened regulation. They fought off some of the toughest restrictions on their ability to invest their own funds. Most significantly, they thwarted an attempt to make them give up their highly profitable derivatives trading desks.’ As so many other aspects of the metamodern, therefore, the reform is both-neither, as it both-neither fully regulates and-nor completely deregulates the financial system. For one can not return to the day and age of modernism, one cannot undo the day and age of postmodernism, one can only go beyond them.

Image: financial reform now. Courtesy

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