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Swaps Revolution Falling Flat as Brokers Keep Grip on New Market 

March 6, 2014
Matthew Leising, Bloomberg

Meet the new swaps market. Same as the old swaps market.

U.S. lawmakers and regulators sought to transform the $693 trillion over-the-counter derivatives market by bringing transparency and competition to a historically private part of the financial industry that worsened the 2008 credit crisis. Loosening banks’ grip over trading was a top priority for Gary Gensler, who oversaw the shift as chairman of the Commodity Futures Trading Commission.

Two weeks after the regulatory shift related to the Dodd-Frank Act took effect, there’s been little change -- and little indication that it’s coming. Banks are trading interest-rate swaps exclusively with banks in one area, while buyers and sellers such as money managers are doing business in another, according to seven people with direct knowledge of the matter, who asked to not be named because they’re not authorized to speak on the topic publicly.

Read more: Bloomberg

 
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