White House Details Plan on Derivatives
By SARAH N. LYNCH
WSJ
WASHINGTON -- The Obama administration detailed a sweeping plan to more closely oversee the giant market for derivatives by forcing many of the products to trade on regulated exchanges.
The proposal, which was sent to legislators on Capitol Hill for consideration, seeks to prevent a repeat of problems last year, when the growing use of derivatives by many financial firms went unchecked. The proposal would essentially make it easier to see prices and make markets more transparent.
The derivatives plan is the final piece of the administration's proposed regulatory revamp, which includes a consumer-protection regulator, mandatory registration of hedge funds and private-equity firms, and new powers aimed at helping the Federal Reserve ensure market stability. While the administration says it believes the plan is on track, its effort has been criticized by lawmakers, the financial-services industry and financial regulators concerned about losing power.
To help ensure support and dodge another regulatory turf battle, the administration proposed spreading regulatory responsibility across several federal agencies. The 115-page draft bill would give the bulk of the proposed new powers over derivatives to the Securities and Exchange Commission and the Commodity Futures Trading Commission but also keep banking regulators in the mix by granting them authority to oversee banks that deal in derivatives.
(Continued here.)
WSJ
WASHINGTON -- The Obama administration detailed a sweeping plan to more closely oversee the giant market for derivatives by forcing many of the products to trade on regulated exchanges.
The proposal, which was sent to legislators on Capitol Hill for consideration, seeks to prevent a repeat of problems last year, when the growing use of derivatives by many financial firms went unchecked. The proposal would essentially make it easier to see prices and make markets more transparent.
The derivatives plan is the final piece of the administration's proposed regulatory revamp, which includes a consumer-protection regulator, mandatory registration of hedge funds and private-equity firms, and new powers aimed at helping the Federal Reserve ensure market stability. While the administration says it believes the plan is on track, its effort has been criticized by lawmakers, the financial-services industry and financial regulators concerned about losing power.
To help ensure support and dodge another regulatory turf battle, the administration proposed spreading regulatory responsibility across several federal agencies. The 115-page draft bill would give the bulk of the proposed new powers over derivatives to the Securities and Exchange Commission and the Commodity Futures Trading Commission but also keep banking regulators in the mix by granting them authority to oversee banks that deal in derivatives.
(Continued here.)
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