Financial Regulatory Forum

FACTBOX-US swaps reforms proposed by Agriculture panel

WASHINGTON, April 23 (Reuters) – The Senate Agriculture Committee has proposed tough rules for the previously unregulated $450 trillion derivatives market, including a requirement for banks to spin off their swaps trading desks.

Banks and major financial companies that dominate the market are concerned the proposal could cut into their profits — and businesses ranging from oil companies to manufacturers that use derivatives to hedge risk are also worried the bill could hike their costs.


SNAP ANALYSIS – Goldman charges give lift to Lincoln US swaps bill

By Roberta Rampton

WASHINGTON, April 16 (Reuters) – Bombshell fraud charges against Goldman Sachs, one of the largest swaps dealers on Wall Street, give new impetus to a tough derivatives reform bill proposed by Senate Agriculture Chairman Blanche Lincoln on Friday.

The bill must be meshed with other proposals that are part of Congressional efforts to reform the financial regulatory system. But Lincoln is now placed to play a leading role in the debate on how the final package will impact on the $450 trillion over-the-counter swaps market.

With one eye to the November mid-term elections, the bill could find support from lawmakers keen to take a stand against excess on Wall Street. But it is unclear whether the White House would support going this far.

NEWSMAKER – Farmer’s daughter US Senator takes on Wall St with derivatives bill

By Charles Abbott and Roberta Rampton

WASHINGTON, April 16 (Reuters) – Senator Blanche Lincoln, a self-styled “farmer’s daughter” facing a tough re-election race in Arkansas, had not been expected to become the latest Democrat to rail against the risky practices of Wall Street.

Lincoln, chairman of the Senate Agriculture Committee, is known for working across party lines on issues, but took Washington by surprise with an aggressive draft bill she was unveiling on Friday that she hopes will force big banks out of the $450 trillion over-the-counter derivatives market.

“My bill will put banks back into the business of banking and prevent future bailouts of Wall Street firms engaging in risky behavior,” Lincoln said in a statement.

U.S. Senate agriculture panel head plans own US swaps reform bill

Senator Blanche Lincoln (D-AR) (C) speaks about the 2007 budget in a news conference at the Capitol in Washington, February 9, 2006. Also pictured are Senate Majority Leader Harry Reid (D-NV) (L) and Senator Kent Conrad (D-ND).   REUTERS/Jonathan Ernst WASHINGTON, Nov 18 (Reuters) – The U.S. Senate Agriculture Committee chairman said on Wednesday she intends to draft legislation “that will bring much-needed transparency and accountability to the over-the-counter derivatives market.”