OTC reforms built to last?

Reform of derivatives markets is gathering pace in the US ahead of a crucial debate in the House of Representatives. But questions remain over exemptions for corporate hedgers and foreign exchange swaps and forwards, meaning the final architecture of the new framework is far from clear. By Peter Madigan

"Laws are like sausages; it’s better not to see them being made,” so Otto von Bismarck, the first German chancellor, allegedly observed. The idiom is very relevant today after three months of exhaustive hearings, discussion drafts, amendments and votes as lawmakers in Washington, DC look to overhaul the supervision of financial markets in the US.

Efforts to comprehensively regulate the over-the-counter derivatives market have cranked up a gear since mid-October, when two House of Representatives