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FSB to Publish Report on Sharing Derivative Data

By Stuart Clark
Published May 8, 2014 Finextra

The Chairman of the Financial Stability Board (FSB), Dr Mark Carney, has written to the G20 Finance Ministers and Central Bank Governors  providing an update on financial reforms. The letter summarises the progress so far in completing the programme of reform for the G20 Brisbane summit (which will take place in November), looks ahead to plans for implementation beyond Brisbane and summarises the initial findings of an FSB review of the representation of jurisdictions on the FSB. 

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Swaps Resolution Expected Ahead of G-20

By Helen Bartholomew
Published April 12, 2014 IFR

Regulatory efforts to tackle the “too big to fail” issue could be nearing a conclusion as legal impediments surrounding swap termination rights that have been hampering a cross-border resolution regime for financial institutions look set be resolved in the coming months, eradicating the threat of future taxpayer bailouts.

According to Elke Koenig, president of Germany’s Federal Financial Supervisory Authority, BaFin, the Financial Stability Board is on track to present proposals to global leaders for an international approach to a temporary stay on OTC derivatives contracts for a failed counterparty – a long-standing obstacle to a global resolution regime.

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IB Head Raises CCP Capital Fears

By Christopher Whittall
Published April 9, 2014 IFR

Regulators should review the business model of clearing houses that handle over-the-counter derivatives to ensure they can withstand future crises, a senior investment banker said today.

Speaking at the ISDA Annual General Meeting in Munich, Jean Pierre Mustier – head of corporate and investment banking at UniCredit – said the G20 goal of shifting OTC derivatives into central counterparties to reduce systemic risk made a lot of sense.

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Crowded Trades a Risk in Clearing Houses

By Philip Stafford
Published April 8, 2014 Financial Times

Are clearing houses overlooking the risks around crowded trades? A new academic paper suggests investors’ positions are far more exposed in turbulent markets than they realise.

It may seem that most issues around clearing house risk have been debated – if not resolved – in the last few years.

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Interdealers Try on the Exchange Business for Size

By Sarah Spikes
Published April 7, 2014 Financial News

If imitation is the sincerest form of flattery, stock exchanges should feel flattered.

As part of the G20’s agenda to prevent another financial crisis, over-the-counter derivatives, which are currently traded over the phone by interdealer brokers, are to be forced onto electronic trading platforms where regulators think they can keep a better eye on what’s going on.

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G20 OTC Derivatives Group Details Remaining Cross-Border Issues

By Staff
Published March 31, 2014 Automated Trader

A Group of 20 group focused on derivatives regulation said in a report that it is working on a number of remaining cross-border implementation issues, including substituted compliance, clearing determinations, margin requirements and access to trade reposittory data.

The Over-the-Counter Derivatives Regulators Group, or ODRG, is working on various issues, including the treatment of branches and affiliates and the implementation of the trading commitment through organized trading platforms, it said.

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Manual Processes and Bottlenecks Threaten to Throttle OTC Derivatives Reform

By Elliott Holley
Published March 12, 2014 Banking Technology

Regulatory change in the OTC derivatives market has produced serious problems that indicate a clear need for more automation of cleared derivatives post-trade processing, according to a new report published by research house Greenwich Associates.

Market reforms currently affecting the derivatives markets include the G20 agenda agreed in Pittsburgh in 2009, under which 20 countries agreed in principle to reduce systemic risk by improving transparency in the OTC derivatives market. The Dodd-Frank Act in the US and EMIR in Europe are attempts to implement that agenda. Both pieces of legislation essentially mandate the central clearing and reporting of the bulk of formerly OTC derivatives contracts, along with their standardisation and trading on exchange-like platforms wherever possible.

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Comment: Risks Remain in G20 Clearing Plan

By Thomas Krantz
Published January 28, 2014 Financial Times

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Exclusive: Global Regulators Eye Forex Benchmarks After Rigging Probe

By Douwe Miedema
Published January 24, 2014 Reuters

A powerful global financial regulator will scrutinize benchmarks used in currency trading, it said on Friday, a first sign that the largely unregulated market may be kept on a tighter leash after allegations of manipulation.

The Financial Stability Board, which coordinates regulation for the Group of 20 leading economies, is already working on a reform of interest rate benchmarks after the Libor interbank rate-fixing scandal.

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Regulating Derivatives: Teething Problems

By M.S.
Published January 22, 2014 The Economist

It must have seemed like a no-brainer in 2009. Leaders of the G-20 vowed to get control over the huge and opaque world of derivatives blamed by many for precipitating the financial crisis that had engulfed them. The most common sorts of derivatives (contracts that take their value from the performance of an underlying asset) were to be traded on recognised platforms, cleared through central counterparty systems with high collateral requirements and reported to trade depositories. The markets would be safer, banking supervisors would know where everyone stood, and taxpayers could sleep quietly at night, knowing they were unlikely to have to bail out the world’s financial system again.

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