US urges end to derivatives secrecy

Posted on March 10 2010

FT.com / Capital Markets - CFTC urges end to derivatives secrecy.

This morning the EU wants to ban the use of credit default swaps on sovereign debt.

Now from the US:

A leading US financial regulator on Tuesday called for the prices of derivatives trades to be disclosed in the same way as stock prices, saying only large Wall Street banks benefited from the current lack of transparency.

Gary Gensler, chairman of the Commodity Futures Trading Commission (CFTC), said standard credit default swaps and other privately traded over-the-counter derivatives needed drastic reform, reflecting their role in the financial crisis.

Fantastic.

And an overdue recognition that banks profit by exploiting their market position to secure super-normal profits at the expense of others.

The right and bankers will of course argue tooth and nail against this. They love free markets - but only to the extent that they can exploit and abuse them, as they have been to date.

Is it possible things might really be changing?

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One Response

  1. Strategist says:
    March 10 2010 at 1:17 pm

    The EU “wants” to do something, the Chairman of the regulatory body “calls” for something to happen. “Is it possible things might really be changing?” I’d be more comforted if this was the morning of an announcement that the change is definitely taking place on a certain date.

    Is this guy Gary in a position to just do it, or does he require legislation from Capitol Hill? Similarly can “Red Adair” Turner just do that here, or does he need the government to act for him?

    Does anybody know?