Says New Rules Would Help Curb Reckless Speculation and Protect Jobs and Businesses
WASHINGTON, Jan. 22 /PRNewswire-USNewswire/ -- Teamsters General President Jim Hoffa today commended President Obama for proposing stricter bank regulation.
President Obama said reform is necessary because of the irresponsibility of financial firms. He pointed out that the financial system is still operating under the same rules that led to its near collapse, and those rules allowed firms to act contrary to the interests of their customers.
"President Obama is clearly moving in the right direction on this issue," Hoffa said. "He understands that our financial system deserves special treatment because it serves a crucial function: providing capital to businesses so they can create jobs. Unfortunately, financial firms are selling irresponsible products such as credit default swaps that destabilize U.S. businesses and jeopardize jobs. It is crucial to regulate these little-understood, 'financial weapons of mass destruction,' to borrow Warren Buffett's term."
The jobs of 30,000 Teamsters who work for YRCW [NASDAQ: YRCW] were threatened recently because banks and equity firms created and marketed credit default swaps from YRCW's bonds. That created an incentive for bondholders with credit default swap coverage to force a bankruptcy to profit on the insurance.
Hoffa pushed YRCW bondholders to take part in a debt-for-equity exchange offer that would save the company. He called out the shameful behavior that would have further hurt the U.S. economy and killed more American jobs. The swap was a critical step to ensure YRCW's survival. The nation's biggest trucker, YRC Worldwide Inc., is the parent company of YRC, Holland, Reddaway and New Penn trucking companies.
The Teamsters Union supports policies that would regulate these financial instruments and other shadow financial market practices currently under consideration by Congress. These instruments and the way they are packaged create perverse economic incentives that favor short-sighted financial gains to Wall Street over restructuring strategies designed to save jobs and preserve workers' standard of living.
Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.
SOURCE International Brotherhood of Teamsters