Derivatives Regulation Could Be Disastrous

Monday, 14 Jun 2010 03:26 PM

By Grover Norquist

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
From the ATR website.

As the House and Senate enter a conference to reconcile their different financial reform bills (HR 4173 and S 3217), it is clear that the different derivative regulations may pose more of a threat to economic prosperity than had previously been suspected.
  • Both bills agree that the vast majority of swap derivative contracts should be traded and cleared on public exchanges, as opposed to through private over-the-counter negotiations between large firms
  • The House bill would offer exemptions to a wide variety of end-user corporations like agribusiness, airlines, industrial manufacturers, auto dealers, and others
  • The Senate version limits the pool of those who can avoid the onerous regulation to a much smaller group
  • Likewise, both bills would subject this new exchange to more regulatory oversight, and the House specifies the SEC and the CFTC as the organizations to exercise that authority, which already adds an unnecessary and burdensome compliance cost
  • Given the type of investors who deploy these complex strategies, these regulatory structures add no additional expertise or scrutiny
The crucial difference between the two bills is Sen. Lincoln’s (D-Ark.) amendment 3739 which creates Section 716. This section would require that all federally-insured banks spin-off their swap trading desks at an initial cost of billions to the firms hardest hit by the collapse.

Their economic hit continues for years because of the billions in lost revenue.

As Mike Cavanagh, chief financial officer of JPMorgan Chase explains, “The net result is going to be a shift in the competitive balance in favor of international banks and unregulated entities, which would be very detrimental to the U.S. banking system and economy.”

© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Obama's Numbers Dip Under Stagnant Recovery

Monday, 20 Oct 2014 11:26 AM

As Democratic candidates seek to distance themselves from Obama’s sinking ship, they must worry about the diminishing su . . .

'Margin Tax' Would Slam Small Businesses in Nev.

Wednesday, 15 Oct 2014 10:01 AM

Despite having no income tax in Nevada, spending interests are pushing a new business tax despite opposition from taxpay . . .

How High Will Marijuana Taxes Go?

Monday, 13 Oct 2014 10:42 AM

If the Washington state legislature hiked taxes on marijuana, will the voters buy it on the ballot? . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved