Geithner Urges Rules on Swaps to Avoid ‘Race to the Bottom’

U.S. Treasury Secretary Timothy F. Geithner said he wants global minimum standards on derivatives trading and urged regulators to avoid a “race to the bottom” in which financial risk moves to the least-supervised economies.

“We need global minimum standards for margins on uncleared derivatives trades,” Geithner said today in a speech in Atlanta. “Without international consensus, the broader cause of central clearing will be undermined. Risk in derivatives will become concentrated in those jurisdictions with the least oversight. This is a recipe for another crisis.”