Dodd-Frank Swaps Legislation Delayed After JPMorgan Trade Losses
U.S. House lawmakers, acting after JPMorgan Chase & Co. (JPM) announced $2 billion in derivatives trading losses, delayed a committee vote on legislation easing Dodd- Frank Act swaps rules.
The U.S. House Agriculture Committee postponed a May 17 committee meeting to vote on the measures, which would limit the international reach of the 2010 regulatory-overhaul law’s swaps regulations and allow more derivatives trading to occur in federally insured banks.
“As always, Washington has a tendency to overreact. While the news of JPMorgan’s trading loss is unfortunate, the bipartisan legislation the committee was scheduled to consider is unrelated to the cause of the trading loss,” Representative Frank D. Lucas, an Oklahoma Republican and chairman of the committee, said in a statement.
“However, this committee will take the time to gather all relevant information before we proceed to ensure there are no unintended consequences of the legislation that would encourage recklessness in our financial institutions,” Lucas said.
The bill restricting the international scope of Dodd-Frank rules gained bipartisan support in a separate U.S. House committee. JPMorgan, Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) have argued that applying the rules to overseas branches would hurt their ability to compete with rivals based outside the U.S.
The legislation would need passage by the full House and Senate before it could be sent to President Barack Obama for final approval. Neither chamber has scheduled a vote.
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