The Chairmen of the House Financial Services and Agriculture Committees have released a concept paper to guide the development of legislation to regulate derivatives. Ag Chair Collin Peterson, D-Minn., says he's pleased he and Financial Services Chair Barney Frank were able to come to agreement on several principles with regard to OTC derivatives reform. He says they've come up with a responsible approach that bridges the differences between those looking to completely eliminate the over-the-counter market and those who believe greater transparency is all that is needed. He says neither of those approaches is a real solution but what he and Frank have developed is.
According to Frank the fundamental purpose is to improve the regulation of derivatives so they continue to perform their important market function but are less likely to contribute to a kind of irresponsibility that can cause a crisis. He says banning or severely diminishing them as an economic instrument is not a desired outcome noting the Ag Committee represents end users for whom they are very important and the Financial Services Committee deals with a lot of financial institutions.
Peterson says the concept paper gives members of both committees time to review and develop ideas, suggestions, thoughts and comments while preparing to tackle the issues when Congress returns in September.
To view the text of the concept paper, visit the Ag Committee Web site at http://agriculture.house.gov.
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