The U.S. Treasury has granted exemption of foreign exchange (FX) swaps from new derivatives rules, Financial Times reports. As per the Treasury, FX swaps are no longer required due to fixed terms of shorter duration, physical exchange of currency and an existing settlement process. The swaps will be subject to the same reporting standards as other derivatives. Dealers, including Deutsche Bank, and non-financial groups, such as Caterpillar, supported the move, saying FX swaps were qualitatively different from other derivatives. Democratic senators, Carl Levin, Maria Cantwell and Tom Harkin, all opposed the exemption.
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