Financial reform: Cantwell’s victory lap

By:  Joel Connelly
Source: Seattle PI

She dug in her heels, won most of what she wanted, and Sen. Maria Cantwell,
D-Wash., took a victory lap on the Senate floor Thursday as Congress’ upper
chamber passed the most sweeping financial reform bill since the Great


Cantwell was one of just two Democratic senators to vote against a weaker
version of the legislation.

She switched after a House-Senate conference committee strengthened the bill.
She was a key vote in support as Senate Democrats blocked a Republican
filibuster and passed the reform bill – both by votes of 60-38.

Sen. Russ Feingold, D-Wisconsin, continued to oppose the bill on final
passage. A trio of Republicans – Sens. Olympia Snowe and Susan Collins, R-Maine
and Scott Brown, R-Mass. – broke with GOP Senate leaders and voted for the
reform legislation.

Cantwell’s key condition was a provision for oversight and transparency in
the over-the-counter derivatives market – an unregulated “dark market” that
soared sevenfold in the last decade.

A derivative is roughly defined as a financial contract, negotiated between
individuals or parties, with a value linked to the future price of an asset,
e.g. a stock or currency.

After the House-Senate panel finished its work, the chairman of the Commodity
Futures Trading Commission assured Cantwell in writing that the bill “explicitly
requires that swap dealers, major swap participants and financial entities use a
clearinghouse for standardized or ‘clearable’ derivatives transactions.”

So, as the Senate neared its final vote, Cantwell did a bit of crowing,
saying in a floor speech:

“It’s the first time over-the-counter derivatives will have to be cleared,
which means a third party will have to validate whether there is real money
behind these transactions…

“So, to the American people, to know that something as dangerous as credit
default swaps brought down our economy, that now, for the first time, we will
have regulation of these over-the-counter derivatives. A $600 trillion market,
which is greater than 10 times the size of world GDP, is a danger to our economy
if it is not regulated.”

“Thank God we’re going to be regulating it for the first time.”