“The U.S. Treasury Department exempted foreign-exchange swaps and forwards from Dodd-Frank Act regulations intended to reduce risk and increase transparency in the derivatives market.”

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“Foreign-exchange swaps and forwards are part of a $4 trillion global daily market for foreign exchange, according to the Basel-based Bank for International Settlements.”

“Dodd-Frank would move most swaps to clearinghouses that collect collateral from buyers and sellers to reduce the risk that one party’s default would disrupt the broader market. The measure was enacted in response to the 2008 credit crisis that regulators and lawmakers said was fueled in part by largely unregulated swaps.”

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“‘Wall Street fought hard to convince Treasury to grant this loophole, which is unjustified by independent research,’ Dennis Kelleher, president and chief executive officer of Better Markets, an organization advocating stricter financial regulation, said in an e-mail statement. ‘That may be why, after two years of consideration, the United States Treasury announced such an important financial regulation decision on a Friday night at 5 p.m. when Congress is on recess and on the eve of the Thanksgiving holiday.’”

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