Finiancial dereg would force banks to spin off derivitives operations.

Discussion in 'Current Events' started by uscitizen, Apr 25, 2010.

  1. uscitizen
    Offline

    uscitizen Senior Member

    Joined:
    May 6, 2007
    Messages:
    45,941
    Thanks Received:
    4,791
    Trophy Points:
    48
    Location:
    My Shack
    Ratings:
    +4,807
    Dodd accepts ban on bank derivatives business


    Email this Story

    Apr 25, 6:57 PM (ET)

    By JIM KUHNHENN

    WASHINGTON (AP) - A Democratic official familiar with Senate banking negotiations says a provision that would force banks to spin off their derivatives operations will be incorporated into sweeping regulatory legislation despite Obama administration misgivings.

    The provision would cost the nation's largest banks billions of dollars in business. In an agreement struck Sunday, Banking Committee Chairman Christopher Dodd agreed to replace his proposed restrictions on derivatives with those of the Senate Agriculture Committee, chaired by Arkansas Democrat Blanche Lincoln.

    Derivatives are financial products - such as corn futures or stock options - whose values depend on the values of underlying investments. Companies use them to hedge against risks, such as interest rate swings or oil price spikes. Derivatives also became vehicles for speculation and helped trigger the financial crisis.

    My Way News - Dodd accepts ban on bank derivatives business
     

Share This Page