Expanding the Reach of the Commodity Exchange Act’s Antitrust Considerations

Many of the world’s largest banks have, over the past few years, paid billions of dollars to settle multiple civil and criminal government enforcement actions and private lawsuits alleging that bank employees conspired with their competitors to stifle competition in the derivatives markets and fix the benchmarks for, among other things, interest rates and foreign exchange rates that serve as critical reference points and price components to everything from trillions of dollars in consumer loans to financial derivatives. Derivatives, so named because their value derives from a reference asset, rate, or other item, include futures contracts, which are agreements to purchase or sell commodities for delivery in the future at prices that are determined at the initiation of the contracts, and swaps, which are agreements to swap (exchange) payment streams at regular intervals based on different factors or formulas. Over-the-counter (“OTC”), meaning not traded on an exchange, derivatives have been a lucrative business for large, global banks, which have tended to dominate many derivatives markets, sometimes even to the point of oligopoly.

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