U.S. Treasury Exempts Foreign Exchange Swaps From Dodd-Frank

The U.S. Treasury Department exempted foreign-exchange swaps and forwards from Dodd-Frank Act regulations intended to reduce risk and increase transparency in the derivatives market.

Foreign-exchange swaps and forwards are short-term transactions that already have high-levels of transparency and risk management, the department said in a statement yesterday announcing the exemption. Deutsche Bank AG, Bank of New York Mellon Corp., UBS AG and other banks urged Treasury Secretary Timothy F. Geithner to exempt the market. The exemption had been resisted by some regulators, Democratic lawmakers and advocates of tighter rules.