Congress is trying to figure out the best way to regulate over-the-counter derivatives, sparking a clash among Democratic lawmakers. Paul Kanjorski, D-Penn., argued that not all OTC derivatives need to be traded through exchanges, while Tom Harkin, D-Iowa, wants to put all derivatives on exchanges. Meanwhile, the financial industry is striving to ensure that any regulatory changes will not drive traders away from U.S. markets. Don Thompson, managing director and general counsel of JPMorgan Chase, who testified on behalf of SIFMA at a congressional hearing, said greater transparency of credit markets could be obtained from clearinghouses for standardized derivatives.
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