Post by TonyV on Apr 21, 2010 17:04:15 GMT -5
Last Updated: April 21. 2010 3:08PM .
Senate committee OKs change to bill sought by Ford
David Shepardson / The Detroit News
Washington -- The Senate Agriculture Committee approved a financial overhaul bill today that included changes sought by Ford Motor Co.
The committee's bill regulates the $600 trillion derivatives market. Derivatives are financial instruments whose values are determined by a commodity or other financial entity's future price.
The devices are often used to make bets on the movement of markets -- for, say, the future value of corn, oil, housing prices and so on.
"My bill will bring the $600 trillion derivatives market out of the dark and into the light of day, ending the days of backroom deals and putting this money on Main Street where it belongs," said Sen. Blanche Lincoln, D-Ark.
The bill's narrow end-user exemption will allow commercial interests, such as electric cooperatives, to be able to hedge business risks, and was sought by Ford and other companies.
Ford praised an amendment from Sen. Debbie Stabenow, D-Lansing, that "creates a very narrow exemption for end-user manufacturers to continue to hedge their manufacturing and financing risks as they do today.
"Senator Stabenow's amendments would simply prevent a small group of pure end-users from being unintentionally swept into provisions that could otherwise divert capital away from investment and jobs," Ford said in a statement.
Lincoln's bill prohibits the Federal Reserve and Federal Deposit Insurance Corp. from providing federal funds to bail out Wall Street firms who engage in risky derivative deals. Banks engaging in risky swap transactions will be forced to spin off their swap dealer desks or be barred from receiving any federal assistance.