SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Derivatives: Darth Vader's Revenge

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: The Ox11/12/2020 12:23:22 PM
1 Recommendation

Recommended By
ggersh

   of 2768
 
Message 33036985

Last week, the New York Times’ Emily Flitter, Jeanna Smialek and Stacy Cowley provided an excellent rundown of the dangerous rollbacks of regulations on the big banks by federal regulators appointed by Donald Trump.

Today, in preparation for a hearing with these regulators, the House Financial Services Committee has released a Memorandum that further outlines how the safety and soundness of the biggest banks have been impacted by changes to regulations.

Many of the rollbacks or watering down of the bank rules have occurred quietly or without the attention of mainstream media. Taken together, the rule changes are striking in their reckless disregard for the safety and soundness of a sector that blew itself up just 12 years ago, taking the U.S. economy and U.S. housing market down with it, while getting propped up with the largest taxpayer and Fed bailout in U.S. history.

Today’s House Memorandum contains one paragraph regarding the de-regulation of derivatives (swaps) that should send a shiver down the spine of every American. It reads:

“Swap Margin Rule. The Dodd-Frank Act required most swaps to be cleared, with margin required. Margin is also required for uncleared swaps involving financial institutions whose primary regulator included one of the three banking regulators. Initial margin is the amount of margin posted when the swap is entered into, while variation margin is changes in the amount of margin posted over time to reflect changes in the underlying swap’s value. In June 2020, these regulators issued a final rule modifying the 2015 swap margin rule, exempting uncleared swaps with inter-affiliates from initial margin requirements, while keeping variation margin requirements. Fed Governor Brainard argued that the rule would significantly weaken a key capital requirement for the largest banks.”

(more at above link)
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext