Fed's Hoenig backs Senator Blanche Lincoln's proposal to bar commercial banks from swaps...

|By:, SA News Editor

Fed's Hoenig backs Senator Blanche Lincoln's proposal to bar commercial banks from swaps trading. In a letter to Lincoln, Hoenig said tradings in swaps and derivatives creates risks that "are generally inconsistent with the funding subsidy afforded institutions backed by a public safety net,” and that "such activities should be placed in a separate entity that does not have access to government backstops."