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Vanishing Act U.S. banks moved billions of dollars in trades beyond Washington’s reach

Reuters Investigates By Charles Levinson Aug. 21, 2015, 2 p.m. GMT

WAR OVER WORDS: Gary Gensler, a veteran of Goldman Sachs, took charge of the CFTC in 2009 as it was drafting tighter rules on derivatives trading. He helped craft a 17-word clause in the Dodd-Frank Wall Street Reform Act that set off a prolonged battle with Wall Street banks. REUTERS/Jose Luis Magana

Part 2: The story of how Wall Street’s giants got around derivatives rules imposed by the CFTC after the financial crisis. The fix: tweaking contracts and shifting deals offshore.

NEW YORK – This spring, traders and analysts working deep in the global swaps markets began picking up peculiar readings: Hundreds of billions of dollars of trades by U.S. banks had seemingly vanished.

“We saw strange things in the data,” said Chris Barnes, a former swaps trader now with ClarusFT, a London-based data firm.

The vanishing of the…

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