The New Swaps Regulatory Framework Under Dodd-Frank - Part 1

In an historic piece of legislation reminiscent of the creation of the Securities Exchange Commission and the regulation of securities markets and broker dealers in 1933 and 1934, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act" or the "Act") will be remembered as the first significant overhaul of US financial markets since the Great Depression.

The Dodd-Frank Act was necessitated by Main Street's view that the Great Recession of 2007-2008 was either caused or accelerated by the swaps market, primarily credit default swaps, an historically opaque over-the-counter market largely traded in the inter-bank and institutional market. The swaps market had grown so large and created such financial inter-connectedness among US and foreign banks, hedge funds, insurance company affiliates and other financial institutions that its near-failure to efficiently operate without a bailout from Washington and other governments of