The US derivatives regulator on 23 July voted to abandon its effort to regulate trading that happens overseas, where it had worried that interconnections between big banks in the global market could transmit risk to the US economy.

The Commodity Futures Trading Commission’s plan will effectively cede oversight of that activity to overseas regulators whose rules are deemed sufficient. The plan, which passed along party lines on a 3-2 vote, represents a win for banks such as JPMorgan Chase and Citigroup that dominate the $558tn global swaps market and have structured their trading in places like London to minimise US oversight.