Derivatives proposal would have far-reaching effects

Sen. Blanche Lincoln, D-Ark., got a measure into the regulatory-reform bill that would force banks to divest their derivatives-trading operations.

While the measure could still die, it shows that lawmakers are willing to consider ideas that could seriously affect derivatives portfolios of major banks, according to The Wall Street Journal.

The proposal likely would have a number of consequences for banks, bank-stock investors and taxpayers.

http://online.wsj.com/article/SB10001424052748703465204575208553099924076.html

Here is the OCC data for the end of 2009 report (March 19, 2010)

Commercial bank, total derivatives and leverage --

> > JP Morgan, $78 trillion and 48/1 leverage

> > Bank of America, $44 trillion and 30/1 leverage

> > Goldman Sachs, $41 trillion and 457/1 leverage

> > Citigroup, $37 trillion and 32/1 leverage

> > Wells Fargo, $4 trillion and 4/1 leverage

More at Risk: http://freerisk.org/wiki/index.php/Derivatives_concentration