U.S. Treasury secretary Timothy Geithner is seeking new global rules to govern the $600 trillion derivatives market, The Wall Street Journal reports. He believes that a standard for uncleared derivatives is required to prevent a shift in derivatives business to less-regulated countries as higher costs on uncleared derivatives will give banks and other companies a reason to avoid such products.
U.S. officials are worried that Hong Kong and Singapore may try to lure business with softer derivatives rules, adds Financial Times. Regulators are planning to ask the Financial Stability Board, a global standard-setting group that includes the European Central Bank, the Bank of England and the Federal Reserve, to consider different proposals, he added.
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