House Ag Subcommittee members request financial regulatory coordination
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, Dec. 20, 2012- Members of the House Agriculture Committee from the General Farm Commodities and Risk Management Subcommittee today sent a letter to U.S. financial regulators regarding the impending December 31 cross-border implementation deadline of the Dodd-Frank Act.
“You are well-aware that widespread confusion and concern still persists among global market participants and international regulators” regarding new rules under Title VII of the act regulating cross-border derivative transactions, state the members.
“American financial institutions can and will lose business to foreign competitors if Title VII rules are not implemented in proper coordination and sequence with other international reform efforts,” notes the letter.
The subcommittee held a hearing last week on the cross-border application of the Dodd-Frank Act that included commissioners from the Commodity Futures Trading Commission (CFTC) and regulators from the European Commission and Japan.
The letter to all five CFTC commissioners, signed by 14 Republicans and Democrats, notes concern that a lack of coordination between foreign and domestic regulators could lead to a disruption of the global derivatives markets.
“Ultimately, if Dodd-Frank is not implemented correctly, American end-users who use swaps to manage everyday business risks may have fewer counterparties,” states the letter. “Fewer counterparties will mean less competition and less liquidity in the markets, which will lead to higher costs and a higher concentration of risk in the United States.”
The subcommittee members identify regulatory conflict concerns echoed by the testimonies of the European Commission's Patrick Pearson and the Financial Services Agency of Japan's Masamichi Kono during the hearing last week.
To view the letter, click here.
#30For more news, go to www.agri-pulse.com