US trade associations step up opposition to Feinstein bill

A number of prominent US trade associations, along with leading financial and energy institutions, have called for the US Senate to veto efforts by Senator Dianne Feinstein to amend US energy legislation that would see more oversight of derivatives.

In a letter to the US Senate, the lobby groups said enactment of the Feinstein amendment would be "premature" at this time. The group claimed this was also the view of US Secretary of the Treasury, Paul O'Neil, Federal Reserve chairman Alan Greenspan, Securities and Exchange Commission (SEC) chairman Harvey Pitt and Commodity Futures Trading Commission chairman James Newsome.

"These expert financial regulators have stated thatenactment of the amendment would be premature given the lack of opportunity for full review of the amendment by the relevant committees of jurisdiction, its implications for energy and other derivatives activity, and the absence of a determination that energy derivatives played a role in the collapse of Enron or the California energy crisis," they said in a letter to the Senate.

The International Swaps and Derivatives Association, the American Bankers Association, The Bond Markets Association, the Managed Funds Association, the Futures Industry Association, the Gold Institute, the Securities Industry Association and the US Chamber of Commerce were among some of the organisations opposed to Feinstein's amendment - S.517.

Financial institutions included: JP Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley and Merrill Lynch.