The U.S. Commodity Futures Trading Commission is scheduled Tuesday to consider whether banks with under $10 billion in assets will be exempt from Dodd-Frank requirements to conduct swap trades through clearinghouses.
The CFTC "is poised" to make the exemption, "two people briefed on the matter" told Bloomberg.
Dodd-Frank specifies that the under $10 billion exemption could be considered by the CFTC, but "congressional lawmakers have told regulators that the asset threshold is flexible" reports Bloomberg. Banks under $50 billion would like to be included in the exemption too.
"We understand and appreciate that the CFTC plans to provide a clearing exemption for banks, but we believe a risk- based measurement is more appropriate because it will better reflect potential risk to the market," Diana Preston, vice president and senior counsel at the American Bankers Association, was quoted as saying in the article.
The case for exempting smaller banks is that "small institutions do not engage in trades of the size or scope necessary to create systemic risk," wrote Senator Robert Casey (D-Penn.)
For the full piece see "CFTC Said to Exempt Banks Under $10 Billion From Clearing" (may require subscription).