A deal between American and European regulators on derivatives has helped banks dodge a bullet. Before a compromise hatched on July 11, the Commodity Futures Trading Commission (CFTC) intended to force swaps involving United States' counterparties to be cleared in America. That would have frozen cross-border flows and hammered volumes by creating separate regulatory jurisdictions. Fortunately for global banks, that scenario has been averted. Banks will now have the choice of trading and clearing transatlantic swaps in either Europe or the United States. To satisfy the U.S. Dodd-Frank reforms, the regulatory framework on swaps will be judged as "essentially identical" in each jurisdiction – although they are nothing of the sort in reality. The two regimes differ in that Europe's swaps reforms are taking longer to implement than America's, but are more stringent on most of the main issues. The European Securities and Markets Authority (ESMA) reckons it will take at least
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