| Sourced From |
At the end of Matt Taibbi’s populist rant on Goldman Sachs (GS) he predicted the next big bubble would come from the government-manufactured carbon market. The Senate is trying to prick the bubble before it forms.
A handful of Senators working on the climate bill are carving out provisions that would bar big banks like Goldman Sachs and JP Morgan (JPM) from trading in the carbon market created from cap and trade legislation, Bloomberg reports.
The senators say they may limit participation to polluters needing permits, ban derivatives or impose stricter regulations than exist in todays energy markets.
Maria Cantwell, a Democrat from Washington state says she doesn’t want a redux of what happened in the oil market last summer. Her plan is to make all carbon trading done through exchanges, rather than over the counter markets.
A Bank Of America trader lamented that the Senate was going to take away the market aspect of cap and trade if they did this. And here’s a choice quote Bloomberg dug up that sums up the banks’ position on the issue:
Markets will have inadequate liquidity without bank participation, Bill Winters, co-chief executive officer of JPMorgans investment bank, said at a July 23 press conference in New York.
Carbon markets
Related posts: