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After the near-death experience of American International Group Inc.
last week, regulators are rushing to get a handle on the largely
unregulated CDS market, which is felt by many to pose a systemic threat
to the global economy. CDSs are contracts that act as insurance
policies to protect against debt default. Holders of debt securities
will buy protection from dealers such as AIG, Deutsche Bank AG,
Goldman, Sachs & Co. and J.P. Morgan Chase & Co., and, if
default occurs, the CDS contract seller agrees to pay the buyer the
face value of the debt security in question.
The New York Insurance Department issued new guidelines that establish some CDSs as insurance, making them subject to state regulation. According to CBS news, the new standards include:
While the New York Insurance Department is the first agency to move to directly regulate default swaps, regulators and the industry began moving toward bringing more clarity
and organization to the CDS market after Bear Stearns Cos. barely
skirted bankruptcy in March. At the urging of the Fed, the industry set
into motion plans to create a clearinghouse to manage the market, with
Clearing Corp. being chosen in May by leading banks and brokers to set
up an exchange for the derivatives that is expected to begin operating
in the third quarter. - George White and Vipal Monga See CBS story CategoriesComments
From: shoelover,
Rumor has it that NY state also invented a Time machine that will take them 10 years into the past................
Posted on:
September 23, 2008 9:04 AM
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New York State is jumping into the 
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Why SEC allowed to deregulate the market in the first place? And now wants regulate? Why all of the looniest brains run the governments and institutions of public trust? More chaos on the way. Just wait and see.