Skip to main content


April 2, 2014

Wall Street Cuts Swaps Exposure

“It is Wall Street’s equivalent of a potluck party.”

“Several times a week, the world’s biggest banks get together, each bringing something for the rest of the group. But instead of casseroles and cookies, the firms come with swaps and other derivatives they aim to pair with offsetting trades held by another bank.”

“Their goal: to leave these virtual gatherings without any leftovers. Banks are seeking to tear up as many derivatives trades they can to meet new, tougher rules on capital.”

“Derivatives—contracts between banks and other investors and linked to interest rates, corporate debt, commodities, currencies and other assets—have become a key battleground in the regulatory effort to avoid a repeat of the financial turmoil of 2008.”

“Since that crisis, U.S. and international regulators have pushed to raise the amount of capital banks must hold against securities and other assets on their books. The proposals have left the largest financial firms scrambling to shrink their balance sheets by reducing, or ‘compressing,’ their overall derivatives holdings valued in the tens of trillions of dollars.”

“‘As one bank said, ‘there are compression parties every weekend,’” said Jason Goldberg, an analyst with Barclays BARC.LN +2.23% PLC. “They’re all getting together and try to offset things that they can offset.’”


Read full Wall Street Journal article here.

In the News


For media inquiries, please contact us at or 202-618-6433.

Contact Us

For media inquiries, please contact or 202-618-6433.

To sign up for our email newsletter, please visit this page.

This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

"* (Required)" indicates required fields

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact or 202-618-6433.


Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today