In this article (, Mother Jones highlights BP's efforts to fight certain aspects of the financial reform legislation being discussed on Capitol Hill.

The proposed legislation would place tighter restrictions on derivatives trading. BP is upset about the proposed creation of a central body through which trades would pass. The clearinghouse would require companies in a trade "to put forward money or other collateral in case" derivatives trades go bad. The purpose behind the clearinghouse is to avoid another AIG-like situation - remember, AIG was caught on the wrong side of many credit default swaps and had to cough up so much cash that it had to be bailed out with federal money. Or, as we put it here in Mississippi, its mouth was making bets its tail could not cash.

BP wants to continue making the sorts of bets that almost buried AIG. Sen. Blanche Lincoln (D-Ark.) has fought off BP's efforts. Hopefully, she and others will continue to do so.

Imagine this scenario: BP is caught on the wrong end of derivative trading at a time in which it is on the hook for another environmental disaster. That could be too much for any company to handle. We need to do all we can to ensure that BP remains well capitalized and does not take on undue risk. The proposed legislation seems to go some way toward ensuring the latter.


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