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BANKS CONCERNED OVER FED MARGIN REGULATIONS AND IMPACT ON FOREIGN COMPETITION

Last month, the Federal Reserve proposed rules that would impose collateral requirements on the non-US divisions of US banks “without regard to whether the counterpart is located inside or outside the United States.” The rule would require banks to post ‘margin’ on any US swap trade not undertaken through a clearinghouse and this is the first indication that the Fed will try to enforce Dodd-Frank regulations abroad, which would certainly be one unique method to ensure proper harmonization. As expected, the response from the banking industry was harsh, with one bank executive saying that, although derivatives rulemakings have thus far not addressed international issues, this rule would create an unlevel playing field outside the US. A second bank official went even further, to state that that this proposal would be “economically destructive” for US banks unless European officials draft a similar rule with a similar timeline.

Other Topics From Full Report Include:

  • BICAMERAL ATTACKS LAUNCHED AT THE CONSUMER FINANCIAL PROTECTION BUREAU
  • HOUSE SUBCOMMITTEE PASSES BILLS AIMED AT MODIFYING PORTIONS OF THE DODD-FRANK ACT
  • HOUSE COMMITTEE PASSES BILL TO DELAY DODD-FRANK CFTC RULEMAKING
  • ANALYSIS INDICATES DODD-FRANK RULEMAKING DEADLINES WILL BE MISSED MORE FREQUENTLY
  • CONCERNS CONTINUE TO GROW WITH THE CFTC/SEC PROPOSED SWAP RULES
  • KEY HOUSE FINANCIAL SERVICES LEADERS FOLLOW UP GRILLING OF FSOC TO MAKE BIPARTISAN CALL FOR FED TO RESUBMIT SIFI RULE
  • BERNANKE SEEKS TO ASSUAGE INDUSTRY FEARS OF BURDENSOME DODD-FRANK REGULATIONS
  • SENATE FINANCE COMMITTEE HOLDS HEARINGS ON BUDGET ENFORCEMENT AND TAX POLICY
  • SEC COMMISSIONER SAYS AGENCY WILL REVISIT MUTUAL FUND RULE 12B-1
  • FITCH FIRST RATINGS AGENCY TO COLLABORATE WITH MSRB ON MUNI BOND RATINGS
  • UPCOMING HEARINGS

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