Philip McBride Johnson wonders how the definition of a swap has evaded regulators for so long.
Imminently, the Commodity Futures Trading Commission will
tell us what a "swap" is. It is hard to regulate something that
is undefined although that has not impeded prior CFTC
pronouncements on the subject.
In 1989, the CFTC issued a "policy statement" on swaps that
gave a regulatory pass to transactions conducted within certain
structural limitations. And it adopted formal regulations
(largely to the same effect) in 1993. Later that decade,
however, the CFTC signaled a change of heart about swaps (due
largely to their proliferation and mutations), setting off a
massive lobbying effort (successful) to block any agency
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