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Financial Derivatives: Actions Taken or Proposed Since May 1994

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Report Type Reports and Testimonies
Report Date Nov. 1, 1996
Report No. GGD/AIMD-97-8
Subject
Summary:

In the wake of a major GAO report in 1994 (GAO/GGD-94-133) detailing the risks posed by complex financial transactions known as derivatives, banking regulators and other have taken steps to improve oversight; however, GAO finds that many of its concerns about derivatives remain valid and several of its recommendations have yet to be implemented. This report examines the steps that have been taken since 1994 to (1) strengthen corporate governance and internal controls for derivatives dealers and major end-users, (2) improve regulation of major U.S. derivatives dealers, (3) provide federal oversight of major derivatives dealers that are unregulated affiliates of securities firms and insurance companies, (4) promulgate comprehensive and consistent accounting and disclosure requirements for derivatives, and (5) harmonize regulatory and accounting standards internationally.

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