New York and London dominate swaps trading, and both have resisted greater regulation. Last year, U.S. regulators and Congress rejected a proposed ban on buying credit-default swaps without owning the underlying debt. Adair Turner, chairman of the U.K. Financial Services Authority, said yesterday that these so-called naked swaps weren’t the “key driver” of the Greek debt crisis and it would be wrong to rush to ban them.
Of course it is wrong to ban them, they are Wall Street's bread and butter and one of America's top exports. The reluctance within both the executive and legislative branches to act against reveals not only their important but the level of influence their originators have in Washington.
Source: bloomberg.com
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