The Fight to Regulate Derivatives (NY Times)

Health care reform and consumer protection has overshadowed derivatives reform for weeks, and the NY Times has finally shined the spot light back on the developing OTC derivative landscape.  In the article, I specifically point out the less than ideal approach of having both the SEC and CFTC oversee the market and the fact that the new proposal would not have seen AIG’s CDS positions in a clearinghouse.

“It immediately concerns me that there would be two regulators,” said Kevin McPartland, an analyst at the Tabb Group. “The government had chance to create a new integrated regulatory structure from scratch and obviously they have chosen not to do that.”

According to Mr. McPartland, none of the swaps that laid A.I.G. low would have been suitable for clearing if the House’s proposals had been in effect in 2008.

Full article at

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