Segregated customer balance reporting and swaps counterparty risk aggregation coming soon to your local regulator, says Allan Grody
The view from the thirty
thousand foot level provided by the popular media and national
dailies paints a bleak picture of dysfunctional politicians,
uncooperative financial institutions, underfunded regulators,
and unintended consequences of hastily litigated rules for
But below the surface are two
simple solutions, pillars of all risk management to come that
are poised to see the light of day. Both are transformational,
a harbinger of what technology is allowing in oversight of
financial institutions. One is the near real time view of
customer segregated balances in the futures markets and the
other is counterparty risk aggregation in the swaps
The foresight of the Chicago
Mercantile Exchange (CME) and the National Futures Association
(NFA), and the unprecedented global initiatives of the G20
through their Financial Stability Board (FSB) have set these
pillars of financial reform and oversight in place.
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