WASHINGTON — Two key Democratic lawmakers are urging financial regulators to protect the ability of pension plans and state and local governments to use interest rate swaps cost-effectively.

In a letter dated Oct. 4, Sen. Tim Johnson, D-S.D., who chairs the Senate Banking Committee, and Rep. Barney Frank, D-Mass., the top Democrat on the House Financial Services Committee and a namesake of last year’s financial reform legislation, asked regulators charged with writing new rules for the derivatives market to avoid unintended consequences that could undermine Congress’ intent to create a “transparent, well-regulated” market.

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