Is it clear to anyone yet that I don’t like the Lincoln OTC derivative proposal?
Kevin McPartland, senior analyst at the TABB Group in New York, said it depends on how the rules are written. “If they force [dealers] to completely spin them off, that just won’t work,” he said. The idea, he said, is also incompatible with the requirement for over-the-counter trades to be centrally cleared since users are required to put up a significant amount of capital to clearinghouses, whereas cutting the entity off from the commercial bank would reduce their access to capital. “Would the individual swaps desks have enough capital to be members of the clearinghouses?”