Federal Reserve Board Governor Susan M. Phillips told a House Agriculture subcommittee Tuesday that the government should not regulate off-exchange derivatives trading.

"Participants in financial markets are often fully capable of protecting their own interests and, in so doing, often serve the public interest equally as well," she said.

Rep. Thomas Ewing, R-Ill., convened the hearing to debate the Commodity Futures Trading Commission's request for wider control over off-exchange- traded derivatives. Ms. Phillips opposed the commission's push for more authority. If rules are needed, the banking agencies should oversee bank trades, and the Securities and Exchange Commission should oversee securities firms, she said.

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