New York lawmakers, led by Charles Schumer, have cautioned the Federal Reserve and other regulators about proposed derivatives rules, Financial Times reports. As per the members of Congress, new rules on financial derivatives could undermine the competitiveness of U.S. banks.
The proposed rules will force the non-U.S. divisions of U.S. banks to collect collateral or margin in the form of cash or securities, regardless of their location. Banks have alerted that any change may increase costs for the users in Europe and the U.S. by forcing them to post “initial margin” on any trade with a U.S. swap dealer that does not use a clearing house.
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