It was no secret that the Obama administration was gunning for strict regulation of the previously unbridled over-the-counter derivatives markets.

But bankers were still caught off guard by the apparent severity of the 115 pages of legislation the Treasury Department released this month. The Treasury's bill is stricter than the rules under discussion by the House. In addition, bankers and other market participants will have less room to combat the proposal as regulators, lawmakers and the administration maintain a more unified stance on derivatives regulation than on any other area of financial regulatory restructuring.

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