Big banks use House Ag Committee to alter rules on derivatives, instruments that began in farming

(Photo of Morgan Chairman Jamie Dimon
by J. Scott Applewhite of AP; corn
photo by smereka via Shutterstock)

The JPMorgan Chase satellite office in London lost $6.2 billion in a matter of weeks, and the company was accused of a series of misdeeds, but the House Agriculture Committee could pass a bill designed to "gut derivatives regulations" and make all the improper and illegal actions legal, or allowed to foster outside of regulatory oversight, Dave Dayen writes in an opinion piece for Salon, headlined "Is JP Morgan a farmer?"  

Dayen notes that agriculture committees have held jurisdiction over derivatives since the mid-19th century, when farmers used derivatives to achieve stability over future prices. Traders still use derivatives for corn and other commodities, but the world of derivatives has grown far more sophisticated over the decades. "One advantage the finance lobby gains by working deregulation through the Ag Committee is that they can work in relative anonymity," he writes. "The ag committees simply garner less attention from the press and the public at large, making it easier for Big Finance to operate." He notes that five days before the committee acted, a senator "delivered a critical report and held an explosive hearing" on the $6.2 billion loss. (Read more)