Come Friday, the hope reformers once had that risky trades made overseas by American banks might be regulated is likely to be crushed. Democrats cozy with Wall Street are just fine with that.
Jul 11, 2013
One of the biggest catastrophes of the 2008 financial crisis came out of the AIG Financial Products division, whose disastrous trades eventually led to a $182 billion bailout of the insurance company. One of the largest financial market blowups since the crisis came from the Chief Investment Office of JPMorgan Chase, where similar trades backfired and cost the company at least $6.2 billion. The common thread? Both of these offices, despite being subsidiaries of American corporations, were based in London, and they enjoyed a degree of autonomy, both from their management teams and from federal regulators, who were unable to recognize the outsized risk until it was too late.