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Otc Derivatives Trading Under The Financial Reform Bill: Is It Tough Enough?, Willa E. Gibson
Otc Derivatives Trading Under The Financial Reform Bill: Is It Tough Enough?, Willa E. Gibson
Willa E Gibson
Both the U.S. House of Representatives and the U.S. Senate have drafted financial reform legislation prompted by the financial market failings the country experienced in 2008. Both versions provide for comprehensive regulation of the OTC derivatives products, which were used extensively by those financial institutions that lost millions of dollars from investments in mortgage securities to insure against subprime mortgage defaults. This paper discusses the efficiency of proposed Congressional legislation to regulate the Over-the-Counter (OTC) derivatives market in light of the provision in the legislation that effectively exempts customized OTC derivatives contracts from clearing requirements and exchange trading. The exemption …