from SLATE; Big Banks Push Against Transparency in Derivatives Market There's probably no better business for banks than derivatives. But no one can say with 100 percent certainty because it's impossible to know how much the big banks even make from derivatives—financial instruments used to hedge risk—and they're working hard to keep it that way, while also making sure to keep out any potential competitors. The banks have many ways of controlling their supremacy in the business, one of the most recent is through clearinghouses, which, ironically were set up during the financial crisis to reduce risk and increase stability in the market. Instead, clearinghouses have become another way for the established players to prevent new ones from entering a market that could desperately use some competition, explains the New York Times. Although this may sound like a problem that only worries the Wall Street elites, the truth is that the way the market works now translates into "higher costs to all Americans," according to the chairman of the Commodity Futures Trading Commission, who is pushing for more oversight of banks in the market.
Read original story in The New York Times [http://www.nytimes.com/2010/12/12/business/12advantage.html] | Sunday, Dec. 12, 2010 -- Jim Devine / "The conventional view serves to protect us from the painful job of thinking." - John Kenneth Galbraith _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
