Strictly speaking the purpose of the financial system is to write, manage and trade claims on future cash flows for the rest of the economy, a purpose that increasingly fell victim to a game for fees, very short-term apparent profits, and arbitraging regulation.
Under section 716, U.S. insured depository institutions and U.S. branches and agencies of foreign banks will be required to “push out” certain types of derivatives dealing activities to affiliated entities. The global effects of the swaps push-out provision are multifaceted.