U.S. House and Senate lawmakers introduced legislation thatwould allow more swaps trading to be conducted at banks that havefederal insurance by repealing part of the Dodd-Frank Act.

The bipartisan measures call for altering the 2010 law'srequirement that banks with access to deposit insurance and theFederal Reserve's discount window move some derivatives trades toseparate affiliates that have their own capital. Commodity, equityand structured swaps tied to some asset-backed securities would beallowed in banks under the legislation.

“People who object are going to say this allows banks to takehuge risks. Not true,” said Representative Jim Himes, a Democratfrom Connecticut who is among the bill's sponsors. “It's going toallow them to maintain inventory of the swaps that their customersneed to buy from them; just the same way when you go to buy a carfrom a car dealer.”

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.