Fractures of the UK Regulation and Supervision of Central Counterparties in the OTC Derivatives Market PDF Download
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Author: Ligia Catherine Arias Barrera
Publisher:
ISBN:
Category : Derivative securities
Languages : en
Pages : 746
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Book Description
Author: Ligia Catherine Arias Barrera
Publisher:
ISBN:
Category : Derivative securities
Languages : en
Pages : 746
Get Book Here
Book Description
Author: Ligia Catherine Arias-Barrera
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
The paper addresses the question of whether risk-based regulation is an efficient approach to the regime of Central Counterparties (CCPs) in the OTC derivatives market. The discussions below will first attempt to throw some light on the way risk-based regulation operates. They highlight the benefits, limits and complexities tied to the adoption of this approach to regulation. The core of the study in this paper is the analysis concerning the parameters that risk-based regulation offers to assess the current regime of Central Counterparties in the OTC derivatives market in the UK. The paper explores the UK risk-based model of regulation and supervision governing OTC derivatives. It is specifically focused on prudential supervision and conduct of business rules governing OTC derivatives transactions and the increasing tendency to use Central Counterparties CCPs. Additionally, this study will identify and assess the risks to the regulator's objectives that are posed by the Central Counterparties CCPs, and to address those using various regulatory tools. Different models of regulation could be considered to analyse the new UK approach. However, this research uses the risk-based regulation -- adopted in the UK -- as a method of analysis of the OTC derivatives regulatory structure. The reason is that risk-based regulation is broad and feasible enough in the time framework of this research. Furthermore, this method is interesting, because it exposes the reality that there might be a limit on the resources that can be spent on controlling certain types of risk. In addition, the method allows analysis of how the studied regime is satisfying expectations regarding transparency and accountability.It is particularly interesting to use the risk-based regulation approach to analyse the UK regulation of CCPs. Indeed, a general concern after the Global Financial Crisis was that risk-based regulation tends to be operated in a manner that places too much emphasis on individual sites and that, as a result, this approach is slow to come to terms with systemic and cumulative risks. Therefore, this discussion leads to question the emphasis that has been placed on the regulation on CCPs in the UK. Is the risk-based regulation the approach assisting regulator in the effective management of systemic risk in the OTC derivatives market? Does it need to be complemented with other strategies of regulation?
Author: Jiabin Huang
Publisher: Bloomsbury Publishing
ISBN: 1847316093
Category : Law
Languages : en
Pages : 230
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Book Description
The Law and Regulation of Central Counterparties provides a detailed analysis of the legal and regulatory aspects of Central Counterparties (CCPs) with an introduction to their role and functions in modern financial markets. The book begins by describing in detail basic elements of modern post-trade infrastructure, exploring the modern functional and operational aspects of CCPs in the markets. It moves on to discuss the relationships between CCPs and their members, and clients of clearing members as non-members, legal issues concerning collateralisation, netting and set-off, and default arrangements that are primarily embedded in the form of the rules and regulations of CCPs. With regard to regulatory issues, the book examines the regulatory framework with reference to the UK and the EU. As to the case for a single CCP for various different types of markets, the analysis covers the advantages and disadvantages of CCP clearing and carries out an assessment of the risks and benefits of a single multi-market CCP.
Author: Ligia Catherine Arias-Barrera
Publisher: Routledge
ISBN: 1351797719
Category : Business & Economics
Languages : en
Pages : 215
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Book Description
The over-the-counter (OTC) derivatives market has captured the attention of regulators after the Global Financial Crisis due to the risk it poses to financial stability. Under the post-crisis regulatory reform the concentration of business, and risks, among a few major players is changed by the concentration of a large portion of transactions in the new market infrastructures, the Central Counterparties (CCPs). This book, for the first time, analyses the regulatory response of the United Kingdom and the United States, the two largest centres of OTC derivatives transactions, and highlights their shortcomings. The book uses a normative risk-based approach to regulation as a methodological lens to analyse the UK regime of CCPs in the OTC derivatives market. It specifically focuses on prudential supervision and conduct of business rules governing OTC derivatives transactions and the move towards enhancing the use of central clearing. The resulting analysis, from a normative risk based approach, suggests that the UK regime for CCPs does not fulfil what would be expected if a coherent risk based approach was taken. Our comments on the Dodd-Frank Act highlight that the incoherent adoption of risk-based approach to regulation affects the effectiveness of the US regime for CCPs. Such a regime does not follow the pace of events of ‘innovation risk’; in particular, the foreseeable changes FinTech will bring to the OTCDM and central clearing services. The second inadequacy of the US regime concerns the dual regulatory structure of the CFTC and the SEC, and the inadequate adoption of different and not well-coordinated regulatory strategies. We also analyse the cross-border implications of the US regime for non-US CCPs that provide clearing services to US market participants. Finally, we study the negative effects of the absence of a clearly defined resolution regime for CCPs.
Author:
Publisher: Lulu.com
ISBN: 9291316695
Category : Bank capital
Languages : en
Pages : 294
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Book Description
Author: Group of Ten. Committee on Payment and Settlement Systems
Publisher:
ISBN:
Category : Clearing of securities
Languages : en
Pages : 80
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Book Description
Author: Mr.Andre Santos
Publisher: International Monetary Fund
ISBN: 147551008X
Category : Business & Economics
Languages : en
Pages : 43
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Book Description
Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.
Author: Ms.Sheri M. Markose
Publisher: International Monetary Fund
ISBN: 1475531869
Category : Business & Economics
Languages : en
Pages : 58
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Book Description
Financial network analysis is used to provide firm level bottom-up holistic visualizations of interconnections of financial obligations in global OTC derivatives markets. This helps to identify Systemically Important Financial Intermediaries (SIFIs), analyse the nature of contagion propagation, and also monitor and design ways of increasing robustness in the network. Based on 2009 FDIC and individually collected firm level data covering gross notional, gross positive (negative) fair value and the netted derivatives assets and liabilities for 202 financial firms which includes 20 SIFIs, the bilateral flows are empirically calibrated to reflect data-based constraints. This produces a tiered network with a distinct highly clustered central core of 12 SIFIs that account for 78 percent of all bilateral exposures and a large number of financial intermediaries (FIs) on the periphery. The topology of the network results in the “Too- Interconnected-To-Fail” (TITF) phenomenon in that the failure of any member of the central tier will bring down other members with the contagion coming to an abrupt end when the ‘super-spreaders’ have demised. As these SIFIs account for the bulk of capital in the system, ipso facto no bank among the top tier can be allowed to fail, highlighting the untenable implicit socialized guarantees needed for these markets to operate at their current levels. Systemic risk costs of highly connected SIFIs nodes are not priced into their holding of capital or collateral. An eigenvector centrality based ‘super-spreader’ tax has been designed and tested for its capacity to reduce the potential socialized losses from failure of SIFIs.
Author: Marc Dobler
Publisher: International Monetary Fund
ISBN: 1513567780
Category : Business & Economics
Languages : en
Pages : 63
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Book Description
The global financial crisis (GFC) has renewed interest in emergency liquidity support (sometimes referred to as “Lender of Last Resort”) provided by central banks to financial institutions and challenged the traditional way of conducting these operations. Despite a vast literature on the topic, central bank approaches and practices vary considerably. In this paper we focus on, for the most part, the provision of idiosyncratic support, approaching it from an operational perspective; highlighting different approaches adopted by central banks; and also identifying some of the issues that arose during the GFC.
Author: Financial Crisis Inquiry Commission
Publisher: Cosimo, Inc.
ISBN: 1616405414
Category : Political Science
Languages : en
Pages : 692
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Book Description
The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.
