Derivatives crackdown: step in the right direction
Posted by ecoshift on May 14, 2009
U.S. regulators seek OTC derivatives crackdown | Reuters
By Charles Abbott and Kevin Drawbaugh
WASHINGTON (Reuters) – The Obama administration moved on Wednesday to exert more control over the shadowy over-the-counter derivatives market, now closely linked to the global credit crisis.
Federal regulators proposed subjecting all over-the-counter derivatives dealers — whose trades are not made through an exchange, making them hard to monitor — to “a robust regime of prudential supervision and regulation,” including conservative capital, reporting and margin requirements.
The plan, sketched out by Treasury Secretary Timothy Geithner and top regulators at a news conference, marks a big step in the administration’s push to rewrite rules for banks and financial markets in response to a credit crisis that has sent economies around the globe reeling.
