EU Lawmakers Disagree on Derivatives Regulation

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During the Federation of European Securities Exchanges annual convention held in Athens on June 17th, a German member of the assembly, Werner Langen, stated that the European Union lawmakers won’t allow the U.S. to influence rules for clearing standardized off- exchange derivatives.

Mr. Langen said he wrote to Treasury Secretary Timothy F. Geithner, saying the EU assembly won’t give in to his demands to expand the scope of a draft law intended to force some trading of over-the-counter derivatives through clearinghouses.    Langen said the Parliament opposes U.S. requests for the law to also include derivatives traded on exchanges.

Mr. Langen remarks were made in response to regulators from the Group of 20 countries efforts to toughen rules on OTC derivatives such as credit-default swaps after the failure Lehman Brothers and the rescue of American International Group, two of the largest CDS traders.

Geithner argued that the scope of the rules should also encompass derivatives that are traded on exchanges in order to prevent regulatory loopholes.

The EU Parliament argued in favor of restricting the measures to over-the-counter transactions, arguing that the G-20 agreement wasn’t intended to cover exchanges.

EU governments and members of the assembly must agree on the final version of the law before it can take effect.

Anna Timone (195 Posts)


Comments

  1. The euro is becoming an ever greater threat to Europe’s common future. The currency union chains together economies that are simply incompatible. Politicians approve one bailout package after the other and, in doing so, have set down a dangerous path that could burden Europeans for generations to come and set the EU back by decades.
    http://www.spiegel.de/international/europe/0,1518,769329,00.html#ref=nlint

    The euro-zone finance ministers have decided not to approve the next tranche of aid to Athens until the Greek parliament passes new austerity measures. The move increases pressure on the Greek government, but it is unlikely to reassure the financial markets.
    http://www.spiegel.de/international/europe/0,1518,769311,00.html#ref=nlint

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