Proposed rules to increase transparency in the $708 trillionprivate derivatives market may combine for an amplified effect thatboosts costs for users, according to industry executives.

Trading in interest-rate, credit-default and other swaps maydecrease if several changes are taken together, James Hill, amanaging director at Morgan Stanley, said today at the annualconference of the International Swaps and Derivatives Associationin Chicago.

“I'm very concerned there's a multiplier effect to this,” Hillsaid during a panel discussion. “That's something we need to lookout for.” He listed increased costs associated with margin forswaps trades, for processing transactions with a clearinghouse andincreased capital requirements banks will have to adopt.

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