Financial Competitive Act of 2013 (H.R. 1341; 113th Congress)

by Stephen Fincher

113th CONGRESS

1st Session

H. R. 1341

IN THE HOUSE OF REPRESENTATIVES

March 21, 2013

Mr. Fincher introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To require the Financial Stability Oversight Council to conduct a study of the likely effects of the differences between the United States and other jurisdictions in implementing the derivatives credit valuation adjustment capital requirement.

Section 1. Short title

This Act may be cited as the “Financial Competitive Act of 2013”.

Sec. 2. Study of implementation of basel iii capital requirements related to derivatives exposures

(a) Study–

The Financial Stability Oversight Council shall conduct a study of the likely effects that differences between the United States and other jurisdictions in implementing the derivatives credit valuation adjustment (in this section referred to as “CVA”) capital requirement would have on—

(1) United States financial institutions that conduct derivatives transactions and participate in derivatives markets;

(2) end users of derivatives; and

(3) international derivatives markets.

(b) Content–

The study required by subsection (a) shall include—

(1) an assessment of—

(A) the extent to which there are differences in the approaches that the United States and other jurisdictions are taking regarding implementation of the CVA capital requirement, and the nature of the differences;

(B) the impact that the differences would have on—

(i) United States financial institutions that conduct derivatives transactions and participate in derivatives markets, including their ability to serve end users of derivatives;

(ii) pricing and other costs of, and services available to, end users of derivatives in the United States and other jurisdictions; and

(iii) the competitiveness of United States financial institutions and United States derivatives markets, including the extent to which differences in the CVA capital requirement could shift derivatives business among jurisdictions; and

(C) the interaction between differing CVA capital requirements and margin rules; and

(2) recommendations regarding steps that the Congress and the Federal financial regulatory agencies that comprise the Financial Stability Oversight Council should take to—

(A) minimize any expected negative effects on United States financial institutions, derivatives markets, and end users; and

(B) encourage greater international consistency in implementation of internationally agreed capital, liquidity, and other prudential standards.

(c) Report–

No later than 90 days after the date of the enactment of this Act, the Financial Stability Oversight Council shall submit a written report containing the results of the study to the Chairman and ranking minority member of the Committees on Agriculture and Financial Services of the House of Representatives, and the Chairman and ranking minority member of the Committees on Agriculture, Nutrition, and Forestry, and Banking, Housing, and Urban Affairs of the Senate.