Dodd Says Elections May Leave New Derivatives Rules Vulnerable to Lobbying
Senate Banking Committee Chairman Christopher Dodd said he is concerned that financial lobbyists may water down the U.S. regulatory overhaul’s derivatives rules if midterm congressional elections shift power to Republicans.
The derivatives measures, which were resisted by industry lobbyists, are “in some jeopardy,” said the Connecticut Democrat in response to questions at a meeting of the non- partisan Atlantic Council in Washington today.
“It’s a very lucrative area,” said Dodd, who co-authored the overhaul. “Some changes could mean an awful lot financially.”
The law establishes for the first time a regulatory structure for the $615 trillion over-the-counter derivatives market. The most contentious part is a provision that will force banks to push some of their swaps trading into subsidiaries.
Derivatives are contracts whose value is derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in interest rates or the weather.
To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.
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