Buffet On Derivatives: Reform For Thee, But Not For Me?
Apr26Investing legend Warren Buffett has criticized the role of derivatives in causing the 2008 financial meltdown. However, the talk on the street is that he is lobbying to exclude existing transactions from the scope of the pending finance reform bill.
It is not hard to see why. Berkshire Hathaway owns over $60 billion of such contracts, which are hedging the financial risk exposure of its vast corporate empire. Buffett would prefer not to subject these holdings to the requirement to post collateral that is embedded in the bill.
One wonders whether the outcome will be the ususal Washington DC “reform” product- a bill riddled with exceptions, exemptions and grandfather clauses that give the politically connected an advantage versus their less savvy peers.
No related posts.
Author : Bob Chiore
Author's Website | Articles From This AuthorAs the business editor of 73 Wire, I am intrigued by the impact of government policy on business and markets. I am a career finance professional with 30 plus years in corporate treasury management.
Comments