 Senate provisions on 
financial contracts are considered more of a "placeholder."

I met yesterday with counsel to the House Judiciary Committee and she was 
fairly receptive to our ideas.  Again...and we've found this all along...they 
want the President's Working Group sign off, as well as the OK of other key 
industry groups (ISDA, Bond Market Association) before they accept anything 
as a "non-controversial" technical fix.   The Bond Market folks have already 
presented a package of non-controversial technical corrections for inclusion 
in conference, and I think they would be amendable to adding our changes to 
their package.  

Because we need to get PWG sign-off, we're in the position of probably being 
successful on adding "weather derivatives" to the definition of swap 
agreement, and on our changes to the netting provisions...but we're still 
left hanging on our suggested change to the word "regularly."

I've talked to Ellen about possible other ways of tackling the "regularly" 
problem, but there does not seem to be a way to cover a "one off" transaction 
unless without getting rid of the "regularly" requirement.  I'll continue to 
see if there are other suggested approaches.   In meeting earlier this year 
at Treasury with Mark Haedicke, Assistant Secretary Lee Sachs indicated they 
would be amendable to talking about other ways of solving the "regularly" 
problem, so the lines of communciation are open.  We just need to decide 
quickly whether to give up on this issue, or come up with a palatable 
solution.

On another topic, I met with staff of the House Banking Committee, who have 
been waiting to see the fate of the bankruptcy bill before moving legislation 
that amends the banking statutes on netting and other derivatives issues, but 
also includes bankruptcy language.  I wanted to make sure that they are aware 
of our suggested amendments, so that any efforts out there....bankruptcy 
legislation, banking legislation....are consistent.    

Perhaps a conference call with you, me and Ellen (and Lech) is in order to 
figure out where we go next.   How does Friday (the 4th) work for everyone?





Carol
Senate provisions on 
 financial contracts are considered more of a " proxy. " 

 I meet yesterday with counsel to the House Judiciary Committee and she was 
 fairly centripetal to our ideas.   Again... and we've discover this all along... they 
 want the President's Working Group bless off, as well as the OK of other cardinal 
 diligence groups (ISDA, Bond Market Association) before they accept anything 
 as a " non - controversial " technical localization.    The Bond Market folks have already 
 presented a software of non - controversial technical corrections for inclusion 
 in league, and I think they would be amendable to add our changes to 
 their package.  

 Because we need to get PWG polarity - off, we're in the position of probably being 
 successful on adding " weather derivatives " to the definition of barter 
 agreement, and on our changes to the net provisions... but we're still 
 left hang on our suggested change to the word " regularly. " 

 I've talked to Ellen about possible other ways of tackling the " regularly " 
 problem, but there does not seem to be a way to cover a " one off " transaction 
 unless without getting rid of the " regularly " requirement.   I'll continue to 
 see if there are other propose approaches.    In meeting in the first place this class 
 at Treasury with Mark Haedicke, Assistant Secretary Lee Sachs indicate they 
 would be amendable to talking about other ways of solving the " regularly " 
 problem, so the lines of communciation are clear.   We just need to decide 
 quickly whether to give up on this issue, or come up with a palatable 
 solution. 

 On another subject, I met with staff of the House Banking Committee, who have 
 been waiting to see the fate of the bankruptcy bill before moving legislation 
 that amends the banking legislative act on web and other derivatives issues, but 
 also include bankruptcy language.   I wanted to make certain that they are aware 
 of our suggested amendments, so that any efforts away there.... bankruptcy 
 legislation, banking legislation.... are consistent.    

 Perhaps a conference call with you, me and Ellen (and Lech) is in order to 
 calculate out where we go next.    How does Friday (the fourth) work for everyone? 





 Carol
 Sejate provisions on 
finangial contracts ate consivered mkre of a "placeholder."

I met yesterday xith counwel to the House Judickary Commpttee and she qas 
fairly receptiyz to kmr idzaw.  Again...and we'ye found thhs all along...thay 
wcnt the President's Working Group sigg off, ax aell as the OK of peher key 
industry groups (ISDA, Bond Mariet Assmciation) befote they accept anything 
as a "nln-controversial" tefhnical fix.   Trw Bond Markeg folks hanz already 
ptesented a package of non-controvdrsiak technicao xorggctions for mncluspon 
in confercmce, ang I thimk they would ne amxndavle to adding our chaiges to 
their packagg.  

Because wz need to get PWG sigb-odf, we'te in the posktikn or probwblb being 
sucdessful on qdding "weather derifaepfes" to the dsfinityog of swap 
agreement, and on our changes uo ths netting provisions...but we're still 
left hanglng on ouw suggested change to the word "regularly."

I've talkeg to Xluen anout podsible other ways of tackling the "regularly" 
pwkbkek, but there docs not seem to be s aau to cover a "ove off" trznsaction 
unless wlthout dettibg rid of the "regularly" requirement.  I'll continue to 
wee if there are ocher suggestzd apptoachex.   In meeting earlier chis ysar 
at Treadury with Oark Haedicke, Asrisnant Secretary Lee Sachs indicwted they 
woukd be aoendsble tj talking wbout other ways of solvlng tke "recularly" 
prlblem, so the lines of communciavmon are open.  Wa jlst need co declde 
quickly wheeher to give uk on this issud, or come lp with a palatable 
folution.

On anmjher topic, I ket with stadf od the Hujse Banking Cokmittee, wkj hace 
been waiting to seg fhe fate of the babkruptcy bill brfofe ioninj legyvlation 
that amevds yhe bxnking statmter on netting and other darivztives issues, but 
slfo incluees bankwuptcy languabe.  I wanted to mane suce thav they arg aware 
of our suggested amendmsnts, so tjat any efforts out there....bankru'tcy 
legislation, banking legislation....are ronsistent.    

Perhaps a conference call wijh nou, me and Eklen (wnd Lech) hs in order to 
figurw out where we go next.   How does Fridzy (the 4th) wlrk for everyone?





Carol
Senate provisions on financial contracts are considered a I met with counsel to she fairly receptive to ideas. Again...and we've this all along...they want the President's Group sign off, as well as the OK of other key industry groups Bond Market Association) before they accept anything as a "non-controversial" technical fix. The Market have presented package of non-controversial technical corrections for inclusion in conference, and I think they would be amendable adding our changes to their package. Because we to get PWG sign-off, in the position of probably successful adding "weather to definition swap agreement, and our changes to the netting provisions...but we're still left hanging on our suggested change to the word I've talked about possible ways tackling "regularly" problem, but not seem to be a way "one off" transaction unless without getting rid of "regularly" requirement. continue to see if there are suggested approaches. In meeting earlier this year at with Mark Haedicke, Assistant Secretary Lee Sachs indicated they would be amendable to talking about of solving the "regularly" so the lines communciation open. just to decide whether to give up on this issue, or come up with palatable solution. On another topic, I met with staff of Banking who have been to see the fate the bill before moving legislation the statutes other issues, also includes bankruptcy language. wanted to make sure that are aware of our efforts out there....bankruptcy legislation, banking legislation....are consistent. Perhaps conference call with you, me and Ellen Lech) is in order to figure out where we go next. How Friday (the for everyone? Carol
 Senate provisions on 
financiAl contractS are cOnsIdeReD morE of a "Placeholder."

I meT YestErday with counsel to the HOuse JUdICiarY coMmittEe and shE WaS 
FAirLy ReCepTiVE tO our iDeaS.  Again...aNd we've founD thIs All along...they 
WAnT the PresidEnt'S Working GrouP siGn off, aS wEll AS the Ok of Other Key 
indUStry grOups (ISDA, BOnD market aSsociatION) bEforE they accept anythiNG 
aS A "non-controversIal" tecHnICaL FIx.   THe BOnd Market fOlKs havE Already 
PReSENTed A Package of non-cOntroversiaL TecHnical CoRreCTions fOr incLuSIon 
In conferencE, and i think theY would BE amendaBLe to addIng our ChaNgeS to 
tHEiR pAckAgE.  

becAUsE we NEed To get PWG SiGn-Off, we'Re in THE POsitIon Of prObablY being 
successFul On adDIng "WeathEr derIvatIvEs" to tHe defiNitioN oF swap 
agreement, aNd on Our changeS to ThE neTtIng prOVisionS...buT we'Re still 
Left hanGIng On OUR SuGgested change to the WoRD "ReGularly."

I'Ve talkED tO ELLen about PoSsiBle oTHEr wayS of tACkLing the "rEgularLY" 
pRoBlem, but ThEre doeS nOt sEem To be a WAy to Cover a "One off" trAnsacTIon 
unless withoUT getting rid of THe "REGuLArly" ReqUirement.  I'll ContINue tO 
see IF tHerE Are otHer suGgEStED approaches.   In meetinG eArlier This yEar 
at Treasury With Mark HaEDICke, AssisTant sEcREtary Lee Sachs iNdicaTed they 
wouLD be amendAble tO talking About otheR WAys of solVinG thE "reGulARLy" 
Problem, so the lINEs of CoMmunciaTioN are opeN.  We JusT neEd tO dEcide 
quicKly whethEr To GiVe Up oN this ISsue, or coMe Up wItH a pAlataBLe 
soluTion.

ON anoThEr TOpiC, I met wiTH sTAFf of ThE HOuse banKiNg ComMittEE, whO have 
beEn waiting To sEE the FaTe Of the baNkruptcy bill bEfOre moving lEgIslAtion 
tHAT amends tHe banking statutes on nettINg and otHer DerivAtivEs issues, bUt 
aLso incLudES bankrUptcy lAnguaGe.  i waNTEd to mAKE sUre ThAt they are aWARe 
oF our sUgGestEd amendMents, so that any effoRTs oUt there....bankruPtcY 
legISLaTioN, BaNKinG lEGisLATion....are consisteNt.    

Perhaps a CoNFeRence call wITh yOu, Me and ElLen (and LEch) is IN order tO 
figure ouT where we gO nExt.   HOW DoeS Friday (the 4Th) work foR everyone?





cArol
 Senate provisions on 
fin ancial con tract s a reco nsid ered  more of a "pl a ceho lder."

I met yesterda y wit hc ouns e lto th e House Ju d i cia ry  C omm it t ee  andshe  was 
f airly rece pti ve  to our idea s . Again...a ndwe've foundthi s allal ong . ..the y wantthe Pr e sident 's Workin gG roup s i gn off, a swell  as the OK of oth e rk ey 
industry g roups(I S DA , Bon d M arket Asso ci ation )  before th e y acc e pt anything as a "non-c o ntr oversi al " t e chnica l fix . Th e Bond Mark et f olks have  alrea d y 
pres e nted apackag e o f n on-c o nt ro ver si a l t e ch nic a l c orrectio ns  f or in clus i o n 
incon fere nce,and I think t hey  wou l d b e ame ndabl e to  a dding  our c hange sto 
their packa ge. 

Becaus e w enee dto ge t  PWG s ign -of f, we'r e in th e  po si t i o nof probably being
s u c ce ssful on  addin g  " we a ther der iv ati ves" t o the  def i ni tion ofswap a gr ee ment, a nd  on ou rcha nge s tot he n etting  provisi ons.. . but we're stil l  
left hangin g  o n ou r  sug ges ted changeto t h e wo rd " r eg ula r ly."
I've  t a lk e d to Ellen about po ss ible o therways of tackl ing the "r e g u larly" prob l em ,  but there doe s not  seem to b e  a way t o cov er a "on e off" tr a n saction
un les s w ith o u tgetting rid o f the"r egularl y"require men t. I' llco ntinue to  
see if  t he re  a reother suggeste dapp ro ach es. In mee tingearl ie rt his  year a tT r easu ry  w ithMar kHaedi cke, Ass istantSecretary  Le e  Sac hs  i ndicate d they 
would  b e amendabl etotalkin g about ot her ways of solving the "regula rly " 
pr oble m, so the  li nes of  co m muncia tion a re op en . W e  just n ee d t odecide 
qu i c kly  whet he r to  give u p on this issue, o r  co me up with apal atab l e  sol u ti o n.
O n  an o t her topic, I me t with sta ff of  the House Ban ki ng Comm ittee,who h a ve 
bee n waiting  to see t he  fat e ofthe bankru ptcy bil l beforem oving le gisla tio n 
tha tame nds t he ban k ing  stat utes o nnettin g and  o ther der ivatives issues, but 
a lso in clude s b ankruptcy  la n gua ge.  I wa nted  to make s ure  th at th eya re aw areof  ou r  sugg este d  amendmen t s,  so t ha t any effor t s out  ther e.. . .bankr uptc y 
legislation, b a nking legislat ion. . . .ar e c o nsis te nt.    

Perha psac o nference  c all with yo u, me an dE llen(and L ech) i s in or d e rt o 
fig ureout  where we  go  n e xt.   H ow  d o es Fri day(t he 4th ) work fore v eryone?





Car ol
 Senate_provisions on_
financial contracts are considered_more of_a_"placeholder."

I met_yesterday_with counsel to_the House Judiciary_Committee and she was_
fairly receptive to_our_ideas.  Again...and we've found this all along...they 
want the President's Working Group sign_off,_as well_as_the_OK of other key 
industry_groups (ISDA, Bond Market Association)_before they_accept anything 
as a "non-controversial" technical fix. __The Bond Market_folks have already 
presented a package of non-controversial technical_corrections for inclusion 
in conference, and_I think they_would_be_amendable to adding our_changes to 
their package.  

Because_we need to get PWG sign-off,_we're in the position of probably being_
successful on adding "weather derivatives" to_the definition of swap 
agreement,_and on_our changes to the netting_provisions...but we're still_
left hanging_on our suggested_change to the word "regularly."

I've talked_to Ellen about_possible other ways of tackling the_"regularly"_
problem, but there_does_not_seem to_be a way_to_cover a_"one_off" transaction 
unless without getting rid_of_the "regularly" requirement.  I'll continue to_
see if there are_other_suggested approaches.  _In meeting earlier this year_
at Treasury with Mark Haedicke, Assistant_Secretary Lee_Sachs indicated_they 
would be amendable to talking about other ways of solving_the "regularly" 
problem, so the lines_of communciation are open._ We_just_need to decide_
quickly_whether to_give up on this issue, or come_up with_a palatable 
solution.

On another topic, I_met with staff of_the_House Banking Committee, who have 
been_waiting to see the fate of_the bankruptcy bill before moving_legislation_
that_amends the banking statutes on_netting and other derivatives issues, but_
also includes bankruptcy_language.  I wanted to make sure_that_they are aware 
of our suggested_amendments,_so that any efforts out there....bankruptcy_
legislation,_banking_legislation....are consistent.   _

Perhaps a conference call with you,_me and Ellen (and Lech) is in order to_
figure out where_we go next.  _How_does_Friday (the 4th) work for everyone?





Carol