UPDATE 1-Big banks gain as U.S. adopts weakened swap rules

Thu May 16, 2013 6:18pm EDT
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* CFTC adopts set of rules for new trading platforms

* Trading over phone will still be allowed

* Critics say rule too close to opaque bilateral trading

* Speculation about Gensler future on the rise

By Douwe Miedema

WASHINGTON, May 16 (Reuters) - Big banks won key concessions in the battle over who dominates the $630 trillion derivatives markets as the top U.S. regulator adopted watered-down rules to bring swaps onto exchange-like trading platforms.

The rules constitute a compromise that critics say means supervisors have fewer tools in hand to rein in the opaque derivatives trading between two parties that was among the causes of the 2007-2009 credit meltdown.

They are part of a global crackdown on financial markets, aimed at increasing transparency by making prices visible to more than just the two trade counterparties and give regulators more grip on the vast trading activities.

The five members of the Commodity Futures Trading Commission had struggled for months to agree on the rules as banks lobbied fiercely to keep the changes to their profitable business as small as possible.   Continued...