Our anonymous Sef operator talks about the confusion and inconsistencies in the global coordination of swaps regulations
One of the missing ingredients of regulatory reform was the
global coordination of rules, despite - to be fair
- best efforts from bodies such as IOSCO and the FSB.
This led to a disparity in timelines and laws and an immediate
fragmentation of liquidity. For example, the world of Interest
Rate Swaps found itself mainly on SEF for USD but some off-SEF,
and other currencies mainly off-SEF with some on-SEF and OTC FX
was mainly migrating off-shore and off-SEF.
This led to inefficient trading,
reduced liquidity, widening of spreads and a theoretical
increase of global systemic risk. All unintended consequences
and absolutely not what a regulator or (capitalist) legislator
would want to see. So what to do?
This article is available exclusively to subscribers
Please log in to continue reading.
Not yet a subscriber?
Click here to take a free trial.
Already have an account? |
Please fill in your details below and a customer service representative will contact you.