Transparency Through Gadgets - Geithner Wants OTC Derivatives Electronically Traded

Geithner urges electronic trading of OTC derivatives. This includes CDSes or credit default swaps.

The U.S. Treasury will tell banks to increase transparency in the over-the-counter derivatives market by making prices available on centralized computer platforms, according to people familiar with the plan.

Electronic execution of trades including interest-rate and credit-default swaps would allow users of the financial instruments to get greater price transparency and make processing trades easier. Transactions in the $684 trillion over-the-counter derivatives market are now typically conducted over the phone between banks and customers.

Now it is very unclear if this is a suggestion or an actual rule.

I'll update this post with any press release from the U.S. Treasury office.

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Information wants to be free

Sounds like the ultimate hacker dream'
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electronic records of derivatives

Treasury Secretary Geithner is calling for new record-keeping requirements for what he calls "non-standard" derivatives. Part of the issue with the recordation of derivatives is that technology (e-mail, text message and so on) has made the formation of legally-binding contracts (such as derivatives) very cheap and easy. Efforts to promote better documenation on derivatives will provoke massive new campaigns to capture, archive and comprehend electronic financial records. See Details: http://legal-beagle.typepad.com/wrights_legal_beagle/2009/03/record-keep... --Ben

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