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Wall Street Wins as U.S. Retreats From Foreign Swap Policing

  • CFTC pulls back from overseeing trades booked abroad
  • Regulators’ Republicans clash with Democrats over rule change
     
Photographer: Mark Kauzlarich/Bloomberg
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Wall Street banks scored a major win Thursday as the U.S. Commodity Futures Trading Commission largely retreated from policing derivatives trades that are booked abroad.

The CFTC’s shift to defer more oversight to foreign regulators follows years of industry lobbying. The change means that going forward, the regulator will no longer assert sweeping jurisdiction over global swap trades. That has been the CFTC’s approach since the 2008 crisis, with the agency previously arguing that it was necessary to keep tabs on transactions that could trigger billions of dollars in losses and threaten the U.S. financial system.