LONDON -- The cancellation of the markup of the Gonzalez-Leach bill in Congress last week is beneficial for the derivatives market, said Gay H. Evans, chairwoman of the International Swaps and Derivatives Association.
The Gonzalez-Leach bill aims to formalize regulatory oversight of banks' activities on derivatives and could potentially introduce stricter disclosure rules for the market.
The Banking Committee postponed discussion of the bill until next year's congressional session.
This will allow time for the derivatives regulators, such as the Commodity Futures Trading Commission, to make their case that derivatives do not need restrictive regulation.
"I think the legislators have realized that the derivatives industry is working with regulators with regard to concerns over the risk expressed in the recent U.S. General Accounting Office report on derivatives," said Ms. Evans, a managing director at Bankers Trust International based in London. "The industry's views are concurrent with the regulators."
She added, "The regulators themselves are very aware of derivatives activity within the financial marketplace and they have moved quickly to respond to the challenges throughout the period that derivatives have been the focus of regulatory scrutiny."
