CDS regulation: Land grab

New York State’s insurance watchdog, regulator of parts of credit derivatives basket-cases American International Group and MBIA, wants to expand its authority. Governor David Paterson has unveiled a plan calling for the seller of any credit default swap sold as a hedge, rather than as an outright bet, to register as an insurance company subject to state oversight. Paterson says he wants to ensure credit protection traders can make good on their obligations. That’s a laudable goal - after all, ...