SEC Adopts Rules on Derivatives Risks

Thousands of banks, thrifts and companies will have to disclose their potential losses from derivatives under controversial rules adopted by the Securities and Exchange Commission. The rules, to be phased in starting this summer, follow huge derivatives losses in recent years by companies such as Procter & Gamble Co. and Gibson Greetings Inc. Commissioners said the complex, 160-page rules seek to give investors a better idea of the potential risks involved in the rapidly growing $70-trillion international derivatives market. The most disputed part of the rules requires companies to choose one of three methods to estimate their risks quantitatively.