On the 13th, Secretary Geithner wrote a letter to Harry Reid outlining the administration's ideas for what over-the-counter derivatives regulation should look like. The administration's proposal goes further than anything currently before Congress. Here are some highlights:
* Clearance through well-regulated central counterparties. (causing central counterparty stocks to have a very good day!)
* Capital requirements and reporting requirements for dealers
* Allowing SEC and CFTC to regulate the market
* Protection of unsophisticated investors (like the Province of Quebec?)
On the subject of securities regulation reform, it is clear that the administration's thinking is clearer and more organized than that of the Congess. Why are the administration's proposals being offered in such a deferential manner? The administration knows how to play hardball. Why aren't they doing it?
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