Senator Blanche Lincoln speaking after the US Senate passed financial reform legislation in May. (Source: AFP)
Proposed new financial regulations in the US set out to better prepare the financial services industry for systemic risks, but their reach will be further than many lawmakers expect. Senator Blanche Lincoln's proposed changes to derivatives rules, including foreign exchange FX and interest rate swaps, will impact corporate treasuries in Asia.
Unfortunately, no one knows just what that impact will be.
There's an overall concern over what additional costs, related to capital charges, that swap dealers could pass...