U.S. banking regulators said that they couldn't formally exempt companies and other commercial "end users" from a rule requiring certain derivatives trades be backed by cash or other collateral, but agency officials said that they don't expect the requirement to change how banks currently treat those customers, the Wall Street Journal reported today. The Federal Reserve, Federal Deposit Insurance Corp. and other bank regulators yesterday unveiled a new version of a rule they first proposed in April 2011. The agencies are expected to vote to solicit an additional round of public comment on the rule before making it final. The rule, required by the 2010 Dodd-Frank law, requires swaps deals that aren't routed through central clearinghouses to be backed up with cash or other collateral. Large U.S. corporations including manufacturers and energy producers balked at the initial version for requiring swaps dealers to require margin from them in certain cases. End users said that the rule would unfairly drive up the cost of hedging against price swings in commodities they depend on and against other business risks.
