If the authorities compel clearing of OTC derivatives, they will be making a big mistake, argues Ruben Lee. The policy is likely to create problems, rather than solve them.
If you are a
politician or a regulator, you had better be responding to the
credit crisis right now. Do something – do
Amongst the myriad proposals out there, the one that has gained
near global consensus is mandatory, or at least strongly
incentivised, clearing of OTC derivatives through a central
counterparty (CCP) or clearing house.
Such universal certainty is reassuring to us contrarians. It is
always a good signal that the policy is wrong, and this
instance is no exception.
This article is available to subscribers and registered users
Please log in to continue reading.
Not yet registered? Take a free trial.
If you have already taken a free trial you
have ongoing access to the analysis section of FOW.com including this story.
Log in using your details below to read.
Already have an account? |