Derivatives Leaders Forum 2010, "Strategies for Increasing Profits under an Evolving Regulatory Framework"

The trading of derivatives, largely privately negotiated and traded, is going through significant transformation, in what constitutes the biggest financial regulatory revamp since the 1930s. In recent years, derivatives have constituted huge profit machines at institutions like Goldman Sachs, JPMorgan and Morgan Stanley. Now proposals in Congress call for Wall Street firms to wall off their derivatives businesses and place them in subsidiaries requiring substantially more capital. Some are now declaring that derivatives trading will be a less profitable endeavor over the next decade. Lawmakers in the Senate and House currently are now tasked with reconciling two financial reform bills passed by their respective bodies, all by the end of June, for President Barack Obama to sign a final bill by July 4. Both House and Senate bills call for boosting capital requirements on firms as they grow and take on more risk. One possible outcome of the negotiations is a clearing requirement for the off-exchange deals. One aspect of the Senate bill that is unlikely to survive, however, is a requirement that banks spin off their derivatives business. Glimmers are emerging of a new financial landscape of lower profits and reduced risks, even before Congress completes the financial regulation overhaul. Will profits really suffer whatever final form of the law emerges? How banks and brokerage firms will adjust to the changes and find ways to work around the new regulations? Which new revenue streams can be thought of to make up for reduced profits? How long will it take for Wall Street to adapt to the new regulations and thrive again? Join us at Derivatives Leaders Forum 2010 and find out.