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Calling Time on ‘Swap ’Til You Drop’ Derivatives Party 

October 9, 2014
John Carney, Wall Street Journal

An impending change to the basic contract governing derivatives demonstrates how much power regulators have to reshape the financial system under Dodd-Frank—and their greater willingness to use it.

Many of the world’s largest banks reportedly have agreed to a change in contracts that will impose a temporary stay on collateral rights under derivatives contracts should regulators step in to resolve a failing financial institution. The International Swaps and Derivatives Association is expected to announce that the change will be part of the basic documents governing swaps, known as “master agreements,” in the next few days.

This comes after the Federal Reserve and the Federal Deposit Insurance Corp. used their review of big banks’ so-called living wills to rebuke them for not moving quickly enough to adopt these changes.

Read more: Wall Street Journal

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