Dodd's bill, which currently includes tough derivatives language crafted in part by Treasury officials, would force most financial companies to trade derivatives on public exchanges and submit deals to central clearinghouses for the first time; previously such transactions were carried out in secret, outside the purview of regulators.
A strong bill can get bipartisan support, and the final bill must include Lincoln's derivatives language.
ACG makes the point that financial reform can be separated into 6 categories or battle grounds: Derivatives Language, Risk Management, Consumer Protection, Federal Reserve Accountability, Resolution Authority, and Investor Protection.
Rosa DeLauro, Jackie Speier and Bart Stupak put together a Dear Colleague letter calling for the strongest possible derivatives language from the conference committee.
Derivatives Language Senate Version Force banks to spin off their derivatives business or keep it in a subsidiary separate from the part of the company that may receive Federally-insured deposits.
It was unclear whether either the fiduciary duty law or the derivatives language will make the final House budget bill, or whether the Senate would include either in its own legislation.
The derivatives language is being weakened and bankruptcy is emerging as the preferred method of unwinding financial institutions, which could leave taxpayers to foot the bill for this expensive procedure.
The commodity futures act, in addition to allowing unregulated trading of financial derivatives, included language advocated by Enron that largely exempted the company from regulation of its energy trading on electronic commodity markets, like its once-popular Enron Online.
In authorizing the President to "take such action, and for such time, as he deems necessary to adjust the imports of (an) article and its derivatives," the language of § 232(b) seems clearly to grant him a measure of discretion in determining the method to be used to adjust imports.
The Sunday Tasmanian noted that "understanding the derivatives of language, both made up and actual such as the French, can only enrich the vocabulary of children".
