House panel approves new OTC derivatives rules

Rep. Barney Frank, Chairman of the House Financial Services Committee, on Capitol Hill, September 26, 2008. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) - New rules for the largely unpoliced, $450-trillion over-the-counter derivatives market were approved by a key congressional committee on Thursday in a win for the Obama administration.

The House of Representatives Financial Services Committee voted largely on party lines in favor of the rules after months of intense lobbying by major banks and corporations to shape legislation proposed by the administration and modified in recent days during House debate.

A vote of the full House on a broader financial reform measure was expected in November. The outlook in the Senate was unclear, with lawmakers struggling to meet an end-of-the-year target for completing reforms intended to prevent a repeat of the 2008-2009 financial crisis, the worst in generations.

Reporting by Kevin Drawbaugh; Editing by James Dalgleish