A bill seeking these derivative exemptions, H.R. 3283, known as the "Swap Jurisdiction Certainty Act" would give banks a massive loophole for gambling with risky derivatives. The bill would let U.S. banks trade derivatives, such as credit default swaps, overseas without having to build up any extra capital to protect against a meltdown in those derivatives. The bill is working its way through Congress and is due for a vote in the House Committee on Agriculture on Thursday.
Timing is everything and so is this bill and JP Morgan Chase's trading blunder. It is certainly dead on arrival in the Senate, and the President would vetoed the bill if this bill passes in Congress.