U.S. Treasury Secretary Timothy F. Geithner said he wants globalminimum standards on derivatives trading and urged regulators toavoid a “race to the bottom” in which financial risk moves to theleast-supervised economies.

“We need global minimum standards for margins on unclearedderivatives trades,” Geithner said today in a speech in Atlanta.“Without international consensus, the broader cause of centralclearing will be undermined. Risk in derivatives will becomeconcentrated in those jurisdictions with the least oversight. Thisis a recipe for another crisis.”

The U.S. Commodity Futures Trading Commission and Securities andExchange Commission are writing new regulations required by theDodd-Frank Act, the financial overhaul enacted last July, afterlargely unregulated derivatives helped fuel the 2008 credit crisis.Dodd-Frank seeks to reduce risk and boost transparency in the $601trillion global swaps market by having most swaps guaranteed bycentral clearinghouses and traded on exchanges or other venues.

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