BUSINESS
03/18/2010 05:12 am ET | Updated May 25, 2011

Banks Hire Derivatives Expert To Fight Financial Reform

Several major banks are fending off legislation meant to regulate the lucrative derivatives market by hiring a high-powered financial lobbyist.

The Hill reports that Edward Rosen, a partner at the Cleary Gottlieb firm, has played a key role in derivatives legislation as Congress hones in on regulating the multi-billion-dollar market. Cleary Gottlieb reported close to $1 million this year lobbying for work on the derivatives market, and according to third-quarter lobbying disclosure reports, Rosen has worked in recent months for financial behemoths like HSBC Securities, Wells Fargo, Deustche Bank, Citigroup and Bank of America Securities.

A little more on Rosen from Cleary Gottlieb's Web site:

Mr. Rosen has served as counsel to the Securities Industry and Financial Markets Association, the Securities Industry Association, the Futures Industry Association, the International Swaps and Derivatives Association and The Bond Market Association.

From The Hill:

"This guy is considered the bee's knees of knowing the inside-out of derivatives," said a financial-services lobbyist. Rosen wrote a two-volume book on derivatives legislation and has spent years working on derivatives law and lobbying. A spokeswoman for Cleary Gottlieb declined to comment.

The House could vote on derivatives legislation, which would give new powers to the Securities and Exchange Commission to regulate the market, as soon as the first week of December.

The Huffington Post reported last month that trading in the unregulated $600 trillion market was partially to blame for spurring last year's financial meltdown.

More than 1,100 banks now trade in derivatives and four banks control the market: JPMorgan Chase, Goldman Sachs, Bank of America and Citibank, according to bank regulator the Office of the Comptroller of the Currency. The Hill reports that commercial banks in the US reported a record $9.2 billion in revenue on derivatives in the first quarter of the year and $5.8 billion in the second quarter, which are the most recent figures available on the market.