Obama Takes On Shadow Banking System
Brian Wingfield and Liz Moyer, 05.13.09 Forbes.comGovernment unveils guidelines to regulate over-the-counter derivatives.
WASHINGTON, D.C. — The Obama administration is taking its first significant steps to shine a light on the so-called shadow banking system.
On Wednesday, Treasury Secretary Timothy Geithner, along with the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission, unveiled basic guidelines for proposed regulation of over-the-counter derivatives. The prevalence and arbitrage of these exotic, unregulated financial products in recent years, usually traded by banks and customers in deals struck over the phone, has helped unravel firms like American International Group ( AIG – news – people ) and brought the U.S. financial system to its knees.
To remedy the situation, administration officials want to establish a central clearinghouse for derivatives trading, and they want Congress to bulk up the regulatory authority of the SEC and CFTC.
Obama Takes On Shadow Banking System – Forbes.com.
The old “Fox Guarding the Hen House”? Is not Geithner a product of the shadow? … joe
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