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Given the havoc caused by credit default swaps, the Obama administration is proposing regulations that could shift most derivatives transactions onto exchanges, where requirements to post collateral keep a lid on counterparty risk. Companies say the changes could limit their use of derivatives by adding to costs and making it harder to account for such transactions. The cost concerns relate to collateral requirements. In a letter to Sen. Mike Crapo (R-Idaho), Randall Durling, director of international finance at Boeing, estimated that as of February, the aircraft manufacturer would have had to put up $150 million in collateral on derivatives positions. That “could significantly impact our business operations since [the money] is not available for our day-to-day business needs,” Durling noted.

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