International Margin Standards for Non-centrally Cleared Derivatives

2020 ◽  
pp. 152-177
Author(s):  
Lucia Quaglia
Keyword(s):  
Standard Setting ◽  
Capital Requirements ◽  
Financial Industry ◽  
International Standard ◽  
The Us ◽  
Transgovernmental Networks ◽  
Private Actors ◽  
Domestic Regulation ◽  
Rule Consistency ◽  
Domestic Level

The elemental regime on margins for derivatives not cleared through CCPs was added later on to the international regulatory agenda. The US was a pace-setter at the international level and a first-mover at the domestic level in promoting relatively precise, stringent and consistent margin requirements. The EU supported the US international standard-setting efforts, but adopted domestic regulation after international rules were set. There were no foot-draggers, even though several jurisdictions on the fringe were reluctant followers. Domestic regulators gathered in international standard-setting bodies facilitated the ironing out of differences amongst and within jurisdictions. Transgovernmental networks also fostered rule consistency, helping to manage the regime complexity resulting from several interlinked elemental regimes on derivatives. Margins were heavily contested by the financial industry, which mobilized to make them less precise and stringent. Private actors also urged regulators to consider this reform in conjunction with other post-crisis standards, notably, capital requirements.

The Politics of Regime Complexity in International Derivatives Regulation

2020 ◽  
Author(s):  
Lucia Quaglia
Keyword(s):  
Financial Regulation ◽  
International Political Economy ◽  
Standard Setting ◽  
Capital Requirements ◽  
Bank Capital ◽  
Financial Industry ◽  
International Standard ◽  
Central Counterparties ◽  
Venue Shopping ◽  
Private Actors

This book examines the post-crisis international derivatives regulation by bringing together the international relations literature on regime complexity and the international political economy literature on financial regulation. Specifically, it addresses three interconnected questions. What factors drove international standard-setting on derivatives post-crisis? Why did international regime complexity emerge? How was it managed and with what outcomes? Theoretically, this research innovatively combines a state-centric, a transgovernmental and a business-led explanations. Empirically, it examines all the main sets of standards (or elemental regimes) concerning derivatives, namely: trading, clearing, and reporting derivatives; resilience, recovery, and resolution of central counterparties; bank capital requirements for bank exposures to central counterparties and derivatives; margins for derivatives non-centrally cleared. Regime complexity in derivatives ensued from the multi-dimensionality and the interlinkages of the problems to tackle, especially because it was a new policy area without a focal international standard-setter. Overall, the international cooperation that took place in order to promote regulatory precision, stringency, and consistency in the regime complex on derivatives was remarkable, especially considering the large number of policy actors involved (states, private actors, regulators). The main jurisdictions played an important role in managing regime complexity, but their effectiveness was constrained by limited domestic coordination. Networks of regulators facilitated international standard-setting and contributed to managing regime complexity through formal and informal tools. The financial industry, at times, lobbied in favour of less precise and stringent rules, engaging in international ‘venue shopping’; other times, it promoted regulatory harmonization and consistency.

International Standards for CCPs

2020 ◽  
pp. 94-125
Author(s):  
Lucia Quaglia
Keyword(s):  
Standard Setting ◽  
International Standards ◽  
Costs And Benefits ◽  
International Standard ◽  
The Us ◽  
Transgovernmental Networks ◽  
Financial Interests ◽  
The Uk ◽  
The Eu ◽  
Division Of Work

After the crisis, following the mandatory central clearing of derivatives, CCPs became crucial nodes of the financial system. Thus, new rules to improve their resilience, recovery, and resolution were issued. Initially, the division of work amongst international standard-setting bodies was unclear and international standards on CCPs lacked granularity. Subsequently, the division of work was clarified and relatively more precise, stringent, and consistent rules on CCPs were issued. The US and the UK were pace-setters internationally and partial first-movers domestically. The EU had preferences that were largely aligned with those of the US. Transgovernmental networks operating in international standard-setting bodies deployed formal and informal tools to promote regulatory consistency within the elemental regime on CCPs. Finally, financial interests mobilized in a variety of venues with a view towards shaping the content of the new standards on the basis of expected costs and benefits.

International Standards for the Reporting of Derivatives Trades

2020 ◽  
pp. 71-93
Author(s):  
Lucia Quaglia
Keyword(s):  
International Standards ◽  
Financial Industry ◽  
Data Format ◽  
The Us ◽  
Transgovernmental Networks ◽  
Technical Issues ◽  
Access To Data ◽  
Domestic Level ◽  
First Mover ◽  
Over Time

This chapter examines the elemental regime on the reporting of derivatives trades to repositories, including the harmonization of data format and aggregation, the politically charged issue of authorities’ access to data, and the technical issues concerning entities, products, and transactions identifiers. Initially, international standards for trade reporting were not considered as a priority and different domestic rules on trade reporting proliferated. Over time, relatively precise, stringent, and consistent international standards concerning entity, product, and transaction identifiers (i.e. the LEI, UPI, and UTI) were issued. The US was a first-mover at the domestic level and a belated pace-setter at the international level, with the support of the EU. A variety of transgovernmental networks of domestic financial regulators facilitated the harmonization of trade reporting, together with the International Standardisation Organisation (ISO) and private sector associations. The financial industry accepted the need for trade reporting, but complained about different domestic requirements that increased reporting costs.

International Standards for Bank Capital Exposures to CCPs and Derivatives

2020 ◽  
pp. 126-151
Author(s):  
Lucia Quaglia
Keyword(s):  
Capital Requirements ◽  
International Standards ◽  
Basel Iii ◽  
Real Economy ◽  
Bank Capital ◽  
Financial Industry ◽  
Leverage Ratio ◽  
The Us ◽  
Credit Valuation Adjustment ◽  
The Uk

The elemental regime on bank capital for derivatives encompassed the credit valuation adjustment (CVA), the leverage ratio, and bank exposures to CCPs. Like for other parts of Basel III, the US and the UK were pace-setters internationally, promoting relatively precise, stringent, and consistent rules. The EU agreed on the need for higher capital requirements, but worried about negative implications for the provision of credit to the real economy. Networks of regulators were instrumental in furthering agreement amongst and within jurisdictions. They also fostered rules consistency through formal and informal coordination tools amongst international standard-setting bodies. The financial industry mobilized in order to reduce the precision and stringency of capital requirements, pointing out the need to consider capital reforms in conjunction with other post-crisis standards, notably, margins.

scholarly journals Comparison and Analysis on Shariah Standards of AAOIFI & BNM For Mudarbah Product

2020 ◽  
Vol 5 (2) ◽  
pp. 48-60
Author(s):  
Mustanir Hussain Wasim ◽  
◽  
Hassnian Ali ◽  
Keyword(s):  
Financial Institutions ◽  
Qualitative Method ◽  
Financial System ◽  
Standard Setting ◽  
Financial Industry ◽  
International Standard ◽  
Auditing Standards ◽  
Islamic Financial Institutions ◽  
Comparison And Analysis

Comparison and Analysis on Shariah Standards of AAOIFI & BNM For Mudarbah Product There are two main international standard setting bodies which provide shariah, accounting and auditing standards for global Islamic financial industry. These two institutions are the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Bank Negara Malaysia (BNM). The objective of the current study is to provide an analysis of Mudarbah financing by comparing the standards of the AAOIFI and BNM. Qualitative method of research is used to analyze the content from archival sources. It is established that there are a lot of clauses between the two standards which need to be highlighted for the development of a comprehensive and uniform Islamic financial system. This study will help to achieve this goal by minimizing the gap between AAOIFI and BNM. Keywords: Mudarbah financing, AAOIFI, BNM, Shariah Standards

scholarly journals Energy Efficiency Standards

2020 ◽  
Vol 18 (1) ◽  
pp. 1-23
Author(s):  
Abdel Fattah Alshadafan
Keyword(s):  
Energy Efficiency ◽  
Standard Setting ◽  
Democratic Governance ◽  
Actual Practice ◽  
International Electrotechnical Commission ◽  
Nation State ◽  
Technical Expertise ◽  
International Standard ◽  
Energy Efficiency Standards

The decrease in the regulative power of states has generated a governance gap that has been filled by, among others, international standard-setting bodies. In these bodies, private technical experts shape the rules that govern commonly used technologies as well as influence various societal outcomes. The legitimacy of such regulatory outsourcing is largely based on a variety of quasi-democratic mechanisms and principles, which these bodies have endeavored to make central to the standard-setting processes. This paper examines these legitimacy-seeking aspirations by comparing the normative claims with the actual practice of developing the international techno-policy standard for TVs by the International Electrotechnical Commission, based on interviews with stakeholders and numerous public and internal documents. The findings suggest that the process is inadequate if the goal is not just to bundle technical expertise but also to meet the standards of democratic governance. The study thus contributes to the literature on standard-setting and legitimacy beyond the nation-state.

Introduction

2020 ◽  
pp. 1-14
Author(s):  
Lucia Quaglia
Keyword(s):  
Political Economy ◽  
International Relations ◽  
International Political Economy ◽  
Standard Setting ◽  
International Standards ◽  
International Regime ◽  
International Regulation ◽  
International Standard ◽  
Derivatives Markets ◽  
Regulatory Reforms

This chapter outlines the theoretical and empirical puzzles that inform the book, its objectives, overall argument, and structure. This research sets out to explain the post-crisis international regulation of derivatives markets. In particular, it addresses three interconnected questions. What factors drove international standard-setting concerning derivatives post-crisis? Why did international regime complexity emerge? How was it managed and with what outcomes? The focus of this volume is on international standards, not the domestic implementation of these standards, or other domestic regulatory reforms concerning derivatives. This chapter also outlines the book’s theoretical and empirical contributions to the international relations literature on regime complexity and the international political economy literature on the regulation of finance.

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