The Commodity Futures Trading Commission (CTFC) is set to finalize this week a critical reform that will trigger banks and traders having to comply with costly new derivatives rules, Reuters reported yesterday. The CTFC will vote on Tuesday on a definition of a "swap," which will start a countdown on compliance dates for big swaps players to start registering with regulators and reporting their trades. Market watchers say this is a big step in regulators' efforts to bring the $650 trillion over-the-counter swaps market out of the shadows. Widespread ignorance of swaps exposure at failed investment firm Lehman Brothers and insurer American International Group aggravated the 2007-2009 financial crisis, which led to billions of dollars in taxpayer bailouts.
