Jon Huntsman President 2012

FINANCIAL
REGULATORY REFORM

Greater transparency will permit greater over­sight by both market participants and regulators

MAXIMIZING DERIVATIVES TRANSPARENCY

As president, Jon Huntsman’s administration will be committed to enhancing transparency in the derivatives markets. An opaque derivatives market was one reason for the systemic impact of the subprime mortgage crisis. Greater transparency will permit greater over­sight by both market participants and regulators, and will also allow end-users to negotiate better terms with Wall Street and in turn lower trading costs. We need to encourage the creation of multiple clearinghouses in order to minimize the systemic impact of a problem in any one of them.

Derivatives should include uniform minimum collateral requirements – that is, limits on potential borrowing - from the onset of their trades; such margin requirements would incentivize prudent risk management internally and build up resilience to losses. Commodity derivatives traded on the Chicago Board of Trade are already subject to such measures.

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