The Senate Banking Committee chair was opponent of corporate hedging loophole.
Senate Banking Committee chair Christopher Dodd’s decision not to seek reelection this year is a good sign for corporate hedgers. Mr. Dodd has been an outspoken opponent of a corporate exemption from proposed requirements that over-the-counter derivatives be cleared via central counterparties and traded on exchanges. His version of the derivatives regulation bill, currently being debated in the Senate, has no such exemption.
Mr. Dodd said, in an interview after submitting his legislation in early November, that he thought such an exemption would be exploited by dealers and other financial institutions, and that it could not be drafted tightly enough to avoid such abuse.
Although Mr. Dodd plans to serve out his term, his lame duck status is likely to reduce his effectiveness.