Pssst, looking to trade a swap without margin? (Reuters)

Another article looking at the new proposed margin rules from the FDIC and CFTC.  The debate here is if end-users, say Exxon, could start marketing swaps to hedgers and compete with the banks as they won’t have to comply with the new margin rules as an end-user.  I argue that as soon as they start trying to get into the market making business, they’re no longer an end-user and should be classified a dealer making the point moot.

Not sure what my quote says is obvious in the context it was used, but basically bank lobbyists will never let end-users get away with making markets without being classified as a major swap participant or dealer.  The loophole is just too big.  There are a number of other issues at play here too, and this article does a good job of stepping through them.

“It will come back to these firms losing their ability to call themselves end-users based on their trading practices. The bank lobbyists will never let this fly,” said Kevin McPartland from TABB Group.

Read the full story at Reuters.com

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