Intensive lobbying by the big banks and insurance companies led to the the watering down of rules that previously required financial institutions to write their assets down to their market values.
The hoot is that the chairman of the subcommittee says -- presumably with a straight face -- that the more than $700,000 in campaign contributions he received over the past two years from the institutions benefiting from the changes was not a factor in his having pushed hard for them. Other members of the subcommittee and influential reprehensibles -- including the irrepressible Barney Frank -- also have been beneficiaries of the warm hearted largesse of the friendly (Wall Street) neighborhood financiers.
According to this Wall Street Journal report, in the first quarter of the current year the changes resulted in the addition of $4.4 billion to the capital of Wells Fargo, in the addition of $413 million to Citigroup's earnings and $349 million to the earnings of The Federal Home Loan Bank of Boston. It's another bubble full of nothing but air but it sure looks great on paper!
However, the financial bagmen are not satisfied yet. They are pushing for still more accounting rule changes to make the actual financial state of their institutions even less transparent. See the above-mentioned Wall Street Journal report for additional and more detailed information about the skulduggery in progress. The financial titans clearly are seeking to free themselves to return to the practices that brought about the economic meltdown from which the rest of the people are continuing to suffer even as their tax dollars are used to bail out and richly reward the bubble makers.
P.S. The Wall Street Journal report referred to above appears under this headline:
Congress Helped Banks Defang Key Rule
P.P.S. If you think they're done trying to hide the ball, look here to see how they're trying to stiff arm corrective accounting rules.
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