Regulating Derivatives
The House Financial Services Committee just approved an amendment mandating that derivatives traded between financial institutions must be traded on an exchange.
That would mean the pricing would be public and the counterparties clear, something that manifestly didn't happen when we all woke up one day to learn that the American economy rested atop a bunch of derivatives that AIG had sold to unknown parties at unclear prices and could only be saved by handing the company an unlimited subsidy. This was one of the tougher lifts for the financial regulatory reform in the House, and it's good to see that Barney Frank managed to clear it.
By
Ezra Klein
|
October 15, 2009; 11:29 AM ET
Categories:
Financial Regulation
,
Solutions
Save & Share:
Previous: Post Chat
Next: Olympia Snowe Vs. Ben Nelson
Posted by: kingstu01 | October 15, 2009 12:02 PM | Report abuse
So how long before Morgan, Goldman and the rest open manufacturing subsidiaries to trade their derivatives for them? (They wouldn't have to start from scratch; they could just buy any of the major manufacturing companies in the US out of petty cash...)
Posted by: paul314 | October 15, 2009 12:34 PM | Report abuse
Sorry to be cynical but I believe this whole charade is just a shakedown of Wall Street lobbyists by the HFSC.
Posted by: bmull | October 15, 2009 12:39 PM | Report abuse
The comments to this entry are closed.
"This was one of the tougher lifts for the financial regulatory reform in the House, and it's good to see that Barney Frank managed to clear it."
Is that Barnie "Fannie is a sound investment" Frank?