US banks are urging regulators writing new rules for the derivatives markets under 2010's Dodd-Frank Act to keep their hands off the banks' swaps businesses in London and other overseas financial centres.
The lobbying efforts highlight the fact that regulations are being written at different speeds in different countries, allowing for "regulatory arbitrage", which officials have sought to stamp out. The US government had to bail out insurer AIG because of soured swap trades by a London-based division.
Lawyers for Bank of America, Citigroup and JPMorgan Chase have written to US regulators and asked them to keep swap business conducted abroad from having to register in the US, warning of "duplicative regulation", "unnecessary cost" and "damage" to their competitiveness in foreign markets. The Securities Industry and Financial Markets Association, a US banking lobby, has told regulators that rigidly applied rules could prompt US swaps dealers to "move offshore".
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