Dodd-Frank's push-out provision: the next steps

Author: Zoe Thomas | Published: 27 Nov 2013
  • Under Dodd-Frank regulations, banks will have to push-out key areas of their derivatives business;
  • Banks will be forced to change their business models to accommodate push-out, as it will require financial institutions to reorganise or prioritise which derivatives they would like to sell;
  • Regulators have expressed concern, but cannot change the provision, which is written into the law.

US banks are taking steps to restructure, or sell-off parts of, their derivatives operations in a bid to comply with Dodd-Frank’s so-called 'push-out’ provision. But US congressmen remain hopeful they can amend the controversial rule.

Under Dodd-Frank, US financial institutions and foreign bank branches with access to deposit insurance or the Federal Reserve discount window have until 2015 to move certain key elements of their derivates trading business to separately-capitalised...