The U.S. House Financial Services Committee published prepared opening remarks from Task Force Chairman Frank Lucas for a hearing on the role of derivatives in the Treasury market. In the remarks, Lucas argued that Treasury-linked swaps, options and futures are important for hedging, liquidity and price discovery in the cash Treasury market, and said the resilience of those markets matters as mandatory central clearing and bank capital rule changes approach. Lucas said derivatives activity supports demand for Treasuries and cited a Federal Reserve Bank of Chicago paper linking stronger derivatives-market liquidity to better cash-market functioning and lower-cost public financing. He pointed to deadlines for central clearing of Treasury cash in December and repo in the following June, welcomed the Securities and Exchange Commission's approval of two additional central counterparties and recent exemptive relief from the Securities and Exchange Commission and Commodity Futures Trading Commission to permit customer cross-margining of offsetting Treasury cash and futures exposures, and said clearing capacity will need to expand as demand for Treasury derivatives, cash trading and clearing rises. He also said he hopes bank capital proposals will recognize the risk-reducing and margin-efficiency benefits of clearing.
U.S. Financial Services Committee 2026-04-29
U.S. House Financial Services Committee holds hearing on Treasury derivatives ahead of central clearing deadlines
The U.S. House Financial Services Committee released opening remarks by Task Force Chairman Frank Lucas for a hearing on derivatives in the Treasury market, emphasizing that Treasury-linked swaps, options and futures are critical for hedging, liquidity and price discovery as mandatory central clearing and bank capital rule changes approach. Lucas highlighted that derivatives liquidity supports cash Treasury market functioning and lower-cost public financing, welcomed the Securities and Exchange Commission’s approval of two additional central counterparties and recent exemptive relief from the SEC and Commodity Futures Trading Commission for customer cross-margining, and stressed that clearing capacity must expand and bank capital proposals should reflect the risk-reducing benefits of clearing.