Regulators Plan Co-ops as Answer to OTC Fragmentation
By Michael Watt and Duncan Wood
Published November 7 2011 FX Week
CLS Bank-style regulatory council could be applied to trade repositories and CCPs to avert market fragmentation, but French regulators are not convinced. Regulators are looking to CLS Bank – the centralised utility that mitigates settlement risk in interbank foreign exchange trades – as a model on which to base oversight of critical infrastructure in over-the-counter derivatives markets, and a way of avoiding further market fragmentation.
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