Derivative rules could cost buyers

Differences over how Europe and the United States plan to regulate derivatives is muddying the picture for buyers, who could be saddled with higher costs, a top industry official said yesterday.

Derivatives were central to the near demise of US insurer AIG, and the unpoliced 290.96 trillion sector is being made more transparent and less risky.

Anthony Belchambers, chief executive of the Futures and Options Association said: "If you load the dealer up with all sorts of additional requirements in this climate, they are not going to absorb it but pass it on." But Judith Hardt, secretary general of the Federation of European Securities Exchanges, disputed this, saying: "It is likely that the increased use of transparent infrastructures, such as clearing houses and exchanges, will increase the transparency in this market and put pressure on prices."

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