Wednesday, May 13, 2009

White House wants oversight of derivatives market

The Obama administration is asking Congress for power to regulate the shadowy derivatives market that many feel contributed to the collapse of financial institutions.

Treasury Secretary Timothy Geithner sent a letter Wednesday to members of Congress saying that he wants to create a centralized electronic system to monitor trading on the derivatives market.

He also called for tougher capital and reporting requirements.

"All (over-the-counter) derivatives dealers and all other firms whose activities in those markets create large exposures to counterparties should be subject to a robust regime of prudential supervision and regulation," Geithner wrote in his letter. "Key elements of that robust regulatory regime must include conservative capital requirements, business conduct standards, reporting requirements and conservative requirements relating to initial margins on counterparty credit exposures."

Obama Takes On Shadow Banking System

Forbes - ‎47 minutes ago‎
To remedy the situation, administration officials want to establish a central clearinghouse for derivatives trading, and they want Congress to bulk up the ...

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