On 11 December a coalition of agriculture and energy trade associations formally submitted two comment letters regarding the Basel III Endgame Proposal issued by the three main US banking regulators as well as the GSIB Surcharge Proposal issued by the Federal Reserve.
The letters raise concerns that the proposed capital requirements will have unintended consequences for the health of US derivatives markets, make hedging significantly more expensive, and threaten access to derivatives markets for end-users in the agriculture and energy sectors. Ultimately, this will have negative consequences on consumers, they warned.
FIA shares in the concerns expressed by these end-user groups and looks forward to working with them, and others, over the coming months to educate policymakers and regulators about the importance of access to risk management and hedging tools like futures and cleared derivatives markets.
