WASHINGTON -- Eight major financial trade groups yesterday announced their unified opposition to a pending derivatives bill that they said will reduce the availability and increase the costs of derivatives products.
The announcement was released on the eve of a hearing on the bill by the House Banking Committee's subcommittee on financial institutions supervision, regulation, and deposit insurance. The subcommittee hearing, which is scheduled for today and is to be chaired by Rep. Stephen Neal, D-N.C., a sponsor of the bill, is a precursor to a subcommittee or full committee vote on the measure.
The bill was introduced in May by House Banking Committee Chairman Henry Gonzalez, D-Tex., the committee's ranking minority member Jim Leach, R-Iowa, and several of their colleagues. It calls for federal regulators to establish comprehensive and consistent regulations that will govern the derivatives activities of banks, federal credit unions, and government-sponsored agencies.
But the eight groups said in their statement that "the bill would unnecessarily reduce the flexibility" of federal regulators who have already made clear at several congressional hearings that they have the tools they need to oversee and regulate derivatives.
The groups said they agree with the Federal Reserve Board, the Comptroller of the Currency, the Federal Deposit Insurance Corp., and other banking and securities regulators that "new legislation involving derivatives is unnecessary."
The eight groups are: the Public Securities Association, the Securities Industry Association, the International Swaps and Derivatives Association, the Futures Industry Association, the Bankers Roundtable, the Association of Financial Holding Companies, the New York Clearinghouse, and the Treasury Management Association.