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Article: BT fallout could hamper derivatives activity in U.S. (Federal Reserve Bank of New Yor sets guidelines for Bankers Trust New York Corp.)
- Article from:
- American Banker
- Article date:
- December 9, 1994
- Author:
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In spelling out more than a dozen guidelines that the besieged Bankers Trust New York Corp. now has to follow in its leveraged derivatives business, the Federal Reserve Bank of New York may have set the stage for costly regulation of the derivatives industry at large.
Industry observers said the guidelines, announced Monday as a result of an inquiry into the bank's sales practices, should act as a warning that the Fed will take action to correct any irregularities it perceives.
Of particular concern was a requirement that Bankers Trust provide clients with costly computer models showing how a derivatives contract will perform under a variety of scenarios.
"The Fed ...