"Proposed Dodd-Frank swaps regulations imposing margin requirements to reduce trading risks will “damage the competitiveness” of foreign-based businesses of U.S. banks compared with their overseas rivals, lawyers for six banks including Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and Morgan Stanley told regulators.
Applying margin requirements to transactions outside the U.S. “will inevitably encourage customers to do business instead with non-U.S. competitors,” lawyers representing the banks said in a letter dated June 29 and sent to the Federal Reserve, Federal Deposit Insurance Corp., Commodity Futures Trading Commission and other regulators.
The letter, signed by lawyers at Sullivan & Cromwell LLP, was sent also on behalf of Bank of America Corp. (BAC), Citigroup Inc. (C) and Wells Fargo & Co. (WFC)
The six banks endorsing the letter executed 97 percent of the $321 trillion of over-the-counter derivatives traded by the top 25 U.S. bank-holding companies as of March 31, according to a June 17 report from the U.S. Office of the Comptroller of the Currency.
Dodd-Frank, the financial-overhaul enacted last July, seeks to reduce risk and boost transparency in the $601 trillion over- the-counter swaps market after largely unregulated trades helped fuel the 2008 credit crisis. The law requires bank regulators to adopt capital and margin requirements for trades not guaranteed by clearinghouses that stand between buyers and sellers".................READ MORE
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