The Antitrust Division Lays an Egg. Again
Economist Craig Pirrong dissects the Antitrust Division's recommendation that the CFTC adopt tougher rules to prevent "powerful entities," i.e., swap dealers from achieving majority ownership in DCMs/SEFs. Pirrong concludes that the DOJ position reflects a "fundamentally flawed analysis of the economics of derivatives trading and clearing . . . and "exhibits glaring deficiencies in its understanding of the economics of competition in trading and in clearing." He argues that the focus on control of a dominant entity by dealers "seems to reflect politics, rather than economics."
Publication
Streetwise Professor
Date
January 12, 2011
Cross References (links may require a Cabinet subscription)
Dodd-Frank Act, Title VII, Sec. 726