To Restore Restrictions on Speculative Investment Activities by Banks and Derivatives Markets

Resolution Number 11-07.22

WHEREAS, between 1933 and 1999, federal law separated investment banking from retail banking, eliminating a conflict of interest that lead to speculative investment endangering deposits; and

WHEREAS, the repeal of this statute was identified by the Financial Crisis Inquiry Commission chaired by prominent California Democrat Phil Angelides as a major factor leading to the financial collapse of 2007-2008, because banks engaged in speculative investment activities, especially trading of credit default swaps, mortgage-backed securities, and other derivatives; and

WHEREAS, while the California Democratic Party unequivocally disavows association with all organizations that are using advocacy for the restoration of these provisions to promulgate personal attacks on President Obama, the re-enactment of the provisions separating retail and investment banking should help to avert future financial crises stemming from risky investments, and should severely limit the massive derivatives "casino" engaged in speculative gambling,

THEREFORE, BE IT RESOLVED that the California Democratic Party urges that their the California Democratic Congressional delegation seek to adopt measures which will lead to the shutdown of gambling and speculation in the derivatives market, and

BE IT FURTHER RESOLVED, that the California Democratic Party send a copy of this resolution to the President of the United States and to California's Democratic national legislative delegations.

Authors: Cyril Yu 71, Art Hoffman 69, David Sonneborn 71

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Adopted by the California Democratic Party
At its July 2011 Executive Board Meeting
Sheraton Park Hotel, Anaheim
July 31, 2011

 

 

 

 

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