Sen. Carl Levin pressed Monday for tougher limits on financial institutions' ability to engage in proprietary trading, arguing that the issue should be part of the regulatory reform bill.
The Michigan Democrat cited an investigation of Goldman Sachs Group, which he said proved it bet against the mortgage market even as it encouraged its clients to invest in it, as proof of why tougher rules are needed.
"The bill on the floor is a good bill, but we think it could be strengthened," Levin, chairman of the Senate Permanent Subcommittee on Investigations, told reporters ahead of a hearing on the issue scheduled for today.
The high-risk trading by Goldman was a contributing factor in the housing market's collapse. "They helped to inflate that bubble by using synthetic securities they helped create," said Levin. And then they "sold to its clients products that it no longer believed in."
Levin's amendment, which is co-sponsored by Sens. Jeff Merkley, D-Ore., Ted Kaufman, D-Del., Sherrod Brown, D-Ohio, and Jeanne Shaheen, D-N.H., is likely to be considered when the bill comes to a vote this week or next.
