Ever since the Dodd-Frank Act was passed after the 2008 stock market crash and subsequent recession, major Wall Street banks have been trying to reform the Bill.

The Bill took into account all of the trading made by banks in order to invest, hedge and profit from the money their clients had left in their hands for safe keeping. Profits made by the banks are rarely, if ever, passed onto their clients. Unlike a banking client who either falls into arrears on the repayment of a loan or enters into the ‘red’ from their bank account, banks are not subject to penalty fees from their clients when client money is lost in an attempt to profit from the funds.

Derivative swaps are big business for banks. Due to trades taking place within a very close-knit community, bank customers rarely get the opportunity to dictate or negotiate interest rate terms. In short, for savings interest is low and for borrowing interest is high. The average bank customer doesn’t get a say in the setting of bank interest rates.

So why do banks get a say in the setting of legislation?

In a recent expose by the New York Times, Citigroup had contracted a lobby group to assist lawmakers in the drafting of a new financial Bill. A Bill which overturns some of the statutes outlined in the original Dodd-Frank act. From the 85 line Bill, which has already been passed, 70 lines of the passed Bill had been written indirectly by Citigroup.

Citigroup, until recently, had kept a low profile with such matters due to the amount of money given to the Bank from the Government’s bailout plan. But now, it appears, Citigroup want to continue to profit from the way it trades derivatives. One of the biggest reasons that banks choose to invest in derivatives is because there is no need to put money up front in order to place the trade. This is the fundamental definition of a Futures contract. The banks only tend to get caught out when the ‘bet’ shows a big loss. This happened in 2008 to American International Group. AIG had placed overwhelmingly large wagers on mortgages that it ultimately could not honor without taxpayer help. The Dodd-Frank ACT did much to stop such practices.

Regulations are implemented to protect consumers. When these regulations are re-written by the very bodies who the consumers are being protected from, it makes a mockery of the law and shows a corrupt and scandalous banking system. Reported recently on the site Regulated Binary Options Brokers, was an article about JP Morgan being fined approximately $5m for giving either the advice or no advice to their wealth management clients.

In everyday life, unless your savings are kept under a mattress, we have to deal with banks. Every transaction relating to our money is made at a cost to us. There is no argument to be made over this and no one to actually listen. It is about time that the large banks are held accountable for their actions. As a consumer we share the risk, but never the profit.