The National Association of Manufacturers joined 170 businesses and organizations (and that’s a lot by coalition letter-writing standards) in sending a letter to Congress to urge members to preserve the ability of companies to use over-the-counter (OTC) derivatives to manage their risk. (Here’s a copy.)
In May the Department of Treasury proposed new regulations of OTC derivatives (Secretary Geithner letter) to address concerns about the stability of financial markets. Congress has held hearings as well.
The Coalition for Derivatives End-Users, which sent the aforementioned letter, supports efforts to improve transparency, accountability and stability in the derivatives market. But the concern is the proposals would significantly increase costs for companies seeking to hedge risks through OTC products, limiting or even eliminating eliminate products needed for risk management.
Leaders of the U.S. Chamber, Business Roundtable, and NAM are all quoted in the news release that went out announcing the letter. To wit:
“Manufacturers in a wide range of industries use customized OTC derivatives to manage the risks of operating their businesses, including fluctuating currency exchange, interest rates and commodity prices. It is critical that policy makers ensure companies’ continued access to OTC derivatives, providing them with greater financial certainty and allowing them to allocate resources to core business activities,” said John Engler, President of the National Association of Manufacturers.
UPDATE (4:15 p.m.): The obvious peg is a House Financial Services Committee hearing next Wednesday, “Reform of the Over-the-Counter Derivative Market: Limiting Risk and Ensuring Fairness.”
Latest posts by Carter Wood (see all)
- Farewell from a Blogger - May 25, 2011
- Activist Ignore Evidence to Back Shakedown Suit Against Chevron - May 25, 2011
- More than a Lawsuit: A Circle of Political Pressure Against Chevron - May 25, 2011