We made a mistake by omitting this hearing in Monday’s “Dispatch from the Front,” Shopfloor.org’s look at the week ahead. The possibility of regulatory overreach on over-the-counter derivatives is a major concern of large companies and manufacturers who want to maintain access to domestic capital.
So here is Treasury Secretary Geithner’s testimony today to a joint hearing of the House Finance and Agriculture Committees, “A Review of the Administration’s Proposal to Regulate the Over-the-Counter Derivatives Market.” Geithner:
In designing its proposed reforms for the OTC derivative markets, the Administration has attempted to achieve four broad objectives:
* Preventing activities in the OTC derivative markets from posing risk to the stability of the financial system;
* Promoting efficiency and transparency of the OTC derivative markets;
* Preventing market manipulation, fraud, and other abuses; and
* Protecting consumers and investors by ensuring that OTC derivatives are not marketed inappropriately to unsophisticated parties.
Good goals, one reckons. Although “inappropriate” is such a weasel word.
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