New York — The previously unregulated credit default swap may be scrutinized by multiple agencies in the future.

That’s the assessment of New York Insurance Superintendent Eric Dinallo, who spoke recently at a securities industry conference. Dinallo predicts a combination of regulatory bodies, including the Federal Reserve, the Commodities Futures Trading Commission and the Securities and Exchange Commission, may all oversee the derivatives market in the future.

Since the role of credit default swaps in the meltdown of insurance giant American International Group became apparent, the question of which regulator would regulate the derivatives market has been the source of much debate.

In September, Dinallo suggested state insurance commissioners should take the lead in regulating the swaps. However, in congressional testimony in November, Dinallo acknowledged that state regulators are ill-suited for the task and advocated that the market come under a broader, federal regulatory regime.

Sources: Reuters, INN archives

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