CFTC Is Said to Propose That Banks Own 20% of Credit Swaps Clearinghouses (Bloomberg)

By | September 30, 2010

The Lynch Amendment is back.  The CFTC is expected to release its first set of proposed rules related to OTC derivatives reform this Friday and it is expected that those rules will include limits on dealer ownership of clearinghouses (among other things).  I get the logic, but from what we know of the expected proposal this approach seems flawed:

“What is an LCH.Clearnet going to do, that’s almost completely dealer-owned?” said Kevin McPartland, a senior analyst with Tabb Group in New York. “I can’t see how they’d expect that kind of massive divestiture of these clearinghouses that control trillions of notional” in swaps trades, he said.

Read the full story at Bloomberg.com

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