Federal Follies: OTC derivative regulation

U.S. Regulators Seek Trace-like Reporting for OTC Derivatives
May 14 (Bloomberg)

There are so many reasons why this won't work, or work well. Simply put, every derivative trade is unique whereas every bond (CUSIP) is the same.

"'It is simply unacceptable in today’s environment that the design and structure of the OTC derivatives market can be controlled by a handful of large dealers," Lubke said."

Unbelievable! First, it was the Fed who pushed banks to merge, and thus over-concentrate the market into "a handful of large dealers" and thereby created the 'systemic risk' they now purport to be able to regulate. Second, do they really think the Microsofts and World Banks will take Crazy Woman Creek Bcp as a ctpy just because they got TARPed? Third, the "handful" was also the result of the Darwinian "natural selection" -- aka "invisible hand".

"Can't anyone here play this game?"

JRB