House votes to repeal derivatives regulations affecting bank swap transactions
The U.S. House of Representatives voted on Oct. 30 to repeal certain derivatives regulations that would require banks to set up separate businesses to handle their swaps transactions.
These OTC derivatives trades would be pushed into separate entities not insured by the federal government as a result of a specific provision that was contained in the Dodd-Frank Act, according to The New York Times. Advocates of this particular facet of the landmark reform have argued that Dodd-Frank should not be watered down.
The legislation passed by the House would still result in many sophisticated derivatives not being eligible for trade by lenders, The Financial Times reported. However, these banks would be able to make use of more standard derivatives.
The bill that was passed in the house, which was previously known as the the Swaps Regulatory Improvement Act, received 292 votes from supporters and 122 from those who opposed it, the media outlet reported. However, the piece of legislation is very unlikely to receive such a warm reception from other entities that are crucial to its implementation.
President Barack Obama has stated that before any provisions contained in the Dodd-Frank Act are reconsidered, government agencies should be given the ability to implement some of the regulations contained in the landmark reform, according to the news source.