Blanche Lincoln requiring banks to spin off their swaps trading units was scaled back.
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Swaps trading is a huge enterprise for the big U.S. banks, who control 97% of the trillions-dollar swaps market.
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Unregulated swaps trading in the financial sector is partially what brought the U.S. economy to its knees in 2008.
Blanche Lincoln would have barred commercial banks from the swaps trading business, a huge activity for the top five banks.
The top five U.S. banks, which enjoy both privileges, control 97% of swaps trading in a market worth trillions of notional value.
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Swaps and other derivatives trading is a huge business for big banks like JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley, which collectively make up 97% of over the counter swaps trading.
Senators and Congressmen now turn their attention to a range of other pressing issues, including the scope of an amendment submitted by surprise earlier this year by Arkansas Democrat Blanche Lincoln that would force banks to separately capitalize or spin off their swaps trading operations.
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One of the most controversial outstanding issues that is likely to drop out of the discussion once the bill has to get matched up with the House version is a proposal by Arkansas Democrat Blanche Lincoln, chairman of the Senate Agriculture Committee, to force banks to spin off their swaps trading desks.
Areas such as interest-rate swaps and foreign-exchange trading incur large fixed costs.
The Obama administration has proposed a central clearinghouse to make trading in credit default swaps, currently privately negotiated, more transparent.
The situation will also likely reignite demands for tighter regulations of swaps and other exotic and complex trading that are now such a large part of global finance.
He also said the Fed is encouraging the development of a central counterparty clearing system for trading in credit default swaps and working on strengthening the resiliency of the short-term secured funding markets that left Bear in the lurch in March.
The SEC, which laid out its plan last week for security-based swaps, wants to ensure customers trading on these platforms can request a quote from a single dealer if they so choose, while the CFTC, which oversees the rest of the market, wants to require swap users to receive prices from no fewer than five dealers at a time.
There currently is no centralized trading platform for credit defaults swaps.
Consumers can also take more responsibility by repairing and caring for the clothes they own, trading their duds at clothing swaps and, for the particularly creative, refashioning last year's styles into fresh looks.
The CFTC also proposed to limit the ownership of clearing houses, exchanges and trading systems by banks and major swaps dealers to 20%, which the banks are disputing as they have economic interests in the controlling the derivatives trade.
The venture between the two Chicago firms is meant to launch within 30 days and would provide a fully integrated trading and clearing platform for credit default swaps, the complex derivative contracts that have been one of the flash points of the credit crisis.
The bill requires standardized swaps to be traded on an exchange or in other centralized trading facilities, the better to promote transparency in this little-understood market.
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There are more complicated arrangements, which involve trading one type of asset for another, called 'swaps.
Greifeld has bought exchange companies in Boston and Philadelphia, as well as Stockholm's OMX Group, with exchanges in northern Europe, to increase the trading of securities and derivatives like options and interest rate swaps.
You won't find any "Get Shorty" memos coming out of the 56, 000-square-foot trading floor in Houston's old Innova merchandise mart--or any round-trip swaps to inflate revenues.
You won't find any "Get Shorty" memos coming out of the 5, 000-square-meter trading floor in the old Innova merchandise mart in Houston, Texas--or any round-trip swaps to inflate revenues.
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