US regulators want to give foreign banks and overseas subsidiaries of US lenders a break from strict new derivatives rules, which include higher capital requirements, the mandated posting of margins and tighter business conduct standards that’ll take a bite out of bank earnings.
The Commodity Futures Trading Commission is looking to grant a temporary exemption to swap dealers of European banks that will allow them to disregard several of these post-crisis regulations governing derivatives transactions.
However, Michel Barnier, the EU’s financial services commissioner, discouraged the move in a stern letter to US financial supervisors last week. He would like to see the exemption delayed “until there is legal clarity” about what the new regulations would entail.