Monday, Oct 05th

Last update05:56:52 AM GMT

You are here News Economy A Secretive Banking Elite Rules Trading in Derivatives

A Secretive Banking Elite Rules Trading in Derivatives

E-mail Print PDF

JP Morgan ChaseOn the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.

Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk.

In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.

The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available.

Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer’s home heating-oil company in Westchester County, north of New York City.

This fall, many of Mr. Singer’s customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.


Most Recent Related Stories...

Oil and gas boomtown gone bust: Gonzales tries to cope

boomtown gone badOnly a year ago, with oil trading near $100 a barrel, residents of this proud and...

GE to move turbine jobs to Europe, China due to EXIM bank closure

GE sends jobs to Europe, ChinaGeneral Electric Co (GE.N) said on Tuesday it will move 500 U.S. power turbine manufacturing jobs...

Major banks investigated for collusion in precious metals market

Banks investigated for precious metalsThe Swiss competition watchdog has launched an investigation into possible collusion in the precious metals market...

Was Tom Hayes Running the Biggest Financial Conspiracy in History?

Tom HayesHayes was a phenom at UBS, one of the best the bank had at trading derivatives....
America's # 1 Enemy
Tee Shirt
& Help Support!
TVNL Tee Shirt
Conserve our Planet
& Help Support!
Get your 9/11 & Media
Deception Dollars
& Help Support!
The Loaded Deck
The First & the Best!
The Media & Bush Admin Exposed!