* Frank: bills will make derivatives threat to economy
* Frank: will offer amendments to scale back bills
* Republicans: bills will help avoid unintended consequences
WASHINGTON, April 2 U.S. Representative Barney
Frank said he will fight efforts by House Republicans to loosen
restrictions on derivatives trading that were included in the
2010 financial oversight law that bears his name.
The full House later this month, when members return from a
break, is expected to vote on two bills that would constrain
regulators as they write tough new rules to regulate the $700
trillion over-the-counter derivatives market.
Frank, in a release on Monday, said the bills go too far and
that Democrats will offer amendments to scale back the changes.
"Thoroughly hoping to take advantage of the fact that public
attention is now focused on the budget and the healthcare bill,
House Republicans are moving substantially to weaken the
regulation of derivatives, which Congress adopted in 2010,"
Frank said in a statement.
Frank said that if changes sought by Democrats are defeated
he will urge the Senate and President Barack Obama to reject the
Providing more oversight and transparency to the derivatives
market was a top priority for supporters of the 2010 Dodd-Frank
financial oversight law.
But Republicans, banks and other financial industry groups
argue that some of the reforms will have unintended
consequences, including making U.S. banks less competitive with
their peers in other countries.
The concerns over the derivatives provisions in the law are
not limited to Republicans and both of the bills Frank opposes
h a ve some Democratic support.
One of the measures expected to be voted on this month would
scale back U.S. regulators' ability to oversee derivatives
transactions by foreign subsidiaries of U.S. companies.
The measure received nine Democratic votes when it was
approved by the House Financial Services Committee last month.
However, an amendment by Frank to allow regulators to exercise
oversight of these trades if they decide it would protect the
U.S. financial system against excessive risk won support from
all the panel's Democrats but failed to pass the full committee.
The other bill would prevent the Securities and Exchange
Commission and the Commodity Futures Trading Commission from
banning voice trade execution, delaying bids, or requiring a
minimum number of participants to respond to price quote
requests. It has the support of Democrats Carolyn Maloney,
Gregory Meeks and Gwen Moore.
Regulators are struggling to quickly implement the
Dodd-Frank law, which was enacted in response to the 2007-2009
financial crisis, providing an opening for opponents to seek
changes before policies take effect.
Of the 222 rules that should have been completed by now, 67
have been finalized, according to a tally released on Monday by
the Davis Polk law firm.