During this current time of Bank failures, defending banks has become a hard thing to do. So as non-financial companies come to their rescue, President OBAMA's administration has proposed a broad sweeping plan of rules for derivatives trading. This is the right thing to do.
In addition, the blueprintforjustice proposes that those using derivatives for "job creation " be exempt.
At issue are governments' laudable determination that the bulk of derivatives be traded on exchanges and cleared by central counterparties.
Currently, derivatives are mostly privately contracted between counterparties "over the counter", beyond the reach of much regulation. Exchange trading and central clearing would make them cheaper and reduce systemic risk by cutting out intermediaries and netting accumulated exposures.
In the end most companies will gain from lower spreads of derivatives on-exchange. And in the case of these gains-- 9% should be set aside for providing healthcare to our nations uninsured.
An Idea who's time has come! ......Hedging for Job Growth and Healthcare instead of wealth.
