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Stand-alone swap desks would inevitably make derivatives more expensive, and thereby discourage excessive speculation.
That change would allow dealers to make derivatives deals over the phone, hardly a victory for transparency.
The group argues that the changes could make derivatives too expensive for them to use — or tie up capital they should be putting to work in their businesses.
The European commission first tabled proposals to make derivatives markets "safer" a year ago, with Michel Barnier, the internal market commissioner, arguing then that the absence of regulation on OTC trades had "contributed to the financial crisis" of 2008.
A proposal unveiled recently by Treasury Secretary Timothy F. Geithner won plaudits for trying to make derivatives trading less freewheeling and more accountable — a plan that hinges in part on using clearinghouses for the trades.
Because private transactions like these can mask big and risky exposures in the markets (think American International Group), financial reformers decided to make derivatives trading more transparent, which is a good thing.
Similar(44)
For instance, turning a novel into a film makes a shift in medium, but without the permission of -- and, probably, a payment to -- the author, the filmmaker would be in violation of the writer's copyright, because the author has the exclusive right to make "derivative" works or license the making of a film.
"By licensing works to the creative commons we encourage people to make derivative works from the things we've created.
Among other things, it would give new regulatory powers to the Federal Reserve, create a new agency to help protect consumers of financial products, and make derivative-trading more transparent.
Confronted with societal pressures to make derivative activities more transparent, managers responded in a manner that can be explained by legitimacy and institutional theories and the maintenance of the managers' and their firms' financial reporting reputations.
We do not make derivative brandy styled upon a European sensibility.
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CEO of Professional Science Editing for Scientists @ prosciediting.com