A House panel has voted to regulate for the first time privately traded derivatives, the kind of financial contract that felled insurance giant American International Group.
The 43-26 vote by the House Financial Services Committee is the first major step toward completing a major overhaul of the regulations governing financial instituions.
The legislation would require that most derivatives be sold on regulated exchanges. In the case of AIG, the company sold a form of derivatives to investors looking to protect themselves against losses in the housing market. When the economy tanked, AIG didn't have enough resources to make good on all of its promises and …
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