WASHINGTON, DC - U.S. Senator Jack Reed (D-RI), a senior member of the Banking Committee, today issued the following statement:

"Derivatives have been unregulated for too long and while banks profited in the shadows, taxpayers paid a heavy price.

"Over the course of the last twelve weeks, Senator Gregg and I had constructive discussions. But ultimately, we were not able to reach a comprehensive consensus that would fill dangerous gaps while allowing companies to safely use derivatives to hedge their risks.

"I am hopeful that there will be bipartisan support for bringing derivatives out in the open, regulating trades, and ensuring that regulators have the tools to keep up with new innovations in the system, and Senator Gregg's thoughtful collaboration to date has aided this effort.

"We need to act and move forward with Chairman Dodd's proposal to bring oversight and transparency to the derivatives market and curb reckless speculation by forcing banks to put enough capital at stake to make good on bad debts.

"Right now, regulators are utterly prohibited from overseeing the swaps market. That situation has to change and any agreement on derivatives must strengthen transparency, require use of clearinghouses, establish a clear pathway to placing suitable products on trading platforms, and provide stronger oversight of banks and other firms that comprise the largest parts of these markets.

"Markets work best when they are transparent and there are rules. That is why regulators, market participants, and the public must have access to data on trades, including price and volume data.

"It is essential that any reform bill establish strong and sensible capital and margin requirements to prevent excessive risk-taking and impose new rules on these bankers to prevent them from taking advantage of companies or municipalities that use these products to manage their risks.

"Every day that goes by without changing these laws leaves hardworking Americans and the U.S. economy vulnerable to another crisis. We have to get this right, and I am committed to passing comprehensive derivatives rules that are tough and effective."