Tags: george | soros | derivatives | us

Soros: Tame Derivatives or Risk Yet Another Crash

Friday, 23 Apr 2010 02:11 PM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Billionaire George Soros says the derivatives behind the Securities and Exchange Commissions’ case against Goldman Sachs “merely cloned existing mortgage-backed securities into imaginary units that mimicked the originals.”

"Whether or not Goldman is guilty, the transaction in question clearly had no social benefit,” Soros writes in the Financial Times. "The primary purpose of the transaction was to generate fees and commissions."

"This synthetic collateralized debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst.”

Requiring derivatives and synthetic securities to be registered would be simple and effective, Soros says, but the legislation currently under consideration won’t accomplish it.

Derivatives traded on exchanges should be registered as a class, Soros says. Tailor-made derivatives would have to be registered individually, with regulators obliged to understand the risks involved.

“Registration is laborious and time-consuming, and would discourage the use of over-the-counter derivatives," Soros notes. “Tailor-made products could be put together from exchange-traded instruments,” he says.

“This would prevent a recurrence of the abuses which contributed to the 2008 crash.”

The full U.S. Senate could move ahead with formal debate on the Obama administration’s financial regulation bill early next week. Key members of both parties say they are close to agreeing on the main elements of the bill.

Senate Majority Leader Harry Reid is planning a test vote before debate begins, and the Congressional Quarterly reports that, if Republicans object, Reid will file to limit debate on the motion to proceed.

© 2014 Moneynews. 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:
Retype 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

Mali's Islamists Withdraw Cease-Fire Pledge

Friday, 04 Jan 2013 13:06 PM

Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they we . . .

Fmr. CIA Director Hayden: Iran Nuclear Crisis Gets 'Scarier'

Tuesday, 17 Jul 2012 18:11 PM

 . . .

Join Fmr. CIA Director for Special Iran Briefing, Assess the Danger

Friday, 13 Jul 2012 12:27 PM

 . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

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