Nuns, other religious, and the Interfaith Center on Corporate Responsibility have all received stern lectures or stony silence from the Boards of Banks to whom they have submitted a shareholder proposal calling for Disclosure particularly of positions and use of collateral posted on Derivatives including Credit Default Swaps. The Banks at which the shareholder proposal will be voted on, following intervention by the U.S. Securities and Exchange Commission, are JP Morgan, Citigroup, and Bank of America; in addition, Goldman Sachs reportedly "agreed separately to add the resolution to its proxy statement."
The Nuns' proposals do not seem onerous nor out of line with Fiduciary Duties which the Banks already should face in their pursuit of Derivatives deals:
The religious organizations want the four broker-dealers to disclose internal policies on how the collateral posted by derivatives customers is used. They're also asking the lenders to segregate the collateral from other accounts, which would prohibit it from being used for anything else.
The shameless Banks are apparently asking you to believe, on faith and in the dark, that as dealers in CDSs and other Derivatives they are doing good work with other peoples' collateral. That would be the same collateral which those other people had to put up in order to backstop the Derivatives.
Not the Banks' collateral. Other peoples' collateral.
Fiduciary Duties demand more of these Banks. Much more. The Banks should start to fulfill their Duties by at least dropping opposition, now, to the Nuns' shareholder proposal -- and the Banks' great fear of the light should no longer get in the way of Full Disclosure.
Please Read The Disclaimer.
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