Democracy Now: Senate Panel Advances Derivatives Regulation

The Senate Agriculture Committee has advanced a proposal to increase oversight of the financial derivatives market. Republican Senator Charles Grassley of Iowa joined the committee’s Democratic members to pass the measure by a vote of 13 to 8. Proposed by Democratic Senator Blanche Lincoln of Arkansas, the measure would ban Wall Street firms from acting as brokers for most forms of derivatives trades. The trades would also be conducted on an open exchange and subject to approval by a separate clearinghouse. Traders would also be required to raise money to cover unexpected losses in the event of a default. Critics have warned the measure could simply shift the risky trading from Wall Street to commercial banks. Congressional leaders say Senate debate on the overall financial regulation bill could begin next week.

~ by wheresthemic on April 22, 2010.

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