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In the late 1990s, a drive to fully regulate swaps was squashed by Congress, with the support of then-President Bill Clinton's Treasury Department.
Under the Dodd-Frank rules, the trading commission and the Securities and Exchange Commission have broad authority to regulate swaps -- complex financial instruments, some of which collapsed during the financial crisis.
As I pointed out before, the futures structure withstood the hurricane winds of the Lehman Brothers failure and was used as the model to regulate swaps.
Sen. Sanders, you're the only one on this stage that voted to deregulate the financial markets in 2000,... to make the SEC and the Commodity Futures Trading Commission no longer able to regulate swaps and derivatives, which were one of the main causes of the collapse in '08.
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After the financial crisis, Congress regulated swaps for the first time in 2010, under the Dodd-Frank financial overhaul law, which many banks fought.
The question is how best to regulate the swaps.
"There has never been a proposal before to regulate the swaps dealers".
And the government adds even more hurdles by trying to regulate the swaps with a variety of forms and fees as well as inspections of the properties involved to ensure that they are of roughly equal value.
Some firms will win, others will lose; and the risk is that systemic problems will remain unresolved.The water-bed effectThe potential losers in this instance can be guessed at thanks to litigation filed by Bloomberg on April 16th against the Commodity Futures Trading Commission (CFTC), the agency that regulates both swaps and futures.
Back in 2000, Congress specifically decided not to regulate credit-default swaps.
Mr. Dinallo and Gov. David A. Paterson have said that New York State should regulate credit-default swaps to some extent, because they are similar to insurance, which is regulated at the state level.
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