Die neue Marktinfrastruktur im OTC Derivatehandel

2019 ◽  
Author(s):  
Max Weber
Keyword(s):  
Financial Stability ◽  
Global Financial Crisis ◽  
Current System ◽  
Over The Counter ◽  
Binding Effect ◽  
Otc Derivatives ◽  
Safety Mechanism ◽  
Clearing System ◽  
Contractual Agreements ◽  
Market Infrastructure

In response to the recent global financial crisis, in 2009 the G20 agreed on the introduction of a mandatory clearing requirement for over-the-counter (OTC) derivatives through a central counterparty (CCP) by the end of 2012. In this study, the author examines this new market infrastructure and its resilience in times of crisis. While doing so, he focuses on the relationship between law and financial (in)stability and adopts some key findings from academic analyses of the crisis. This reveals that the rigid enforcement of (financial) contracts in times of crisis may destabilise the financial system. As a result, the binding effect of contractual agreements such as margin calls—implemented as a safety mechanism—must be relaxed, if necessary. This situation is aggravated by the design of CCPs as they concentrate the risks of the OTC derivatives market and have thus become systemically important nodes. In addition, the author identifies reverse interests within the clearing system to the detriment of financial stability. Ultimately, he proposes the modification of the current system by integrating the CCP into a public–private partnership.

scholarly journals The EU Bank Resolution Framework: Institutional Changes of the Financial Safety Net in Poland and the Czech Republic

2019 ◽  
pp. 201-214
Author(s):  
Michal Janovec ◽  
Anna Jurkowska-Zeidler
Keyword(s):  
Czech Republic ◽  
Financial Market ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Current System ◽  
Safety Net ◽  
Legal Framework ◽  
The Czech Republic ◽  
Financial Safety Net ◽  
The Eu

In response to the global financial crisis, fundamental changes have been made at the European level to the legal framework of single financial market reg ulation and super vision. One of the significant legal steps was the establishment of a common system of recovery and resolution of failing banks. Within the framework of a systemic approach to the EU financial market, the article illustrates the steps taken towards the implementation of the resolution framework into domestic financial markets of Poland and the Czech Republic. The core content of the article is comparison of the role and location of the Polish and Czech resolution authorities in the architecture of the national safety net. The main aim of the contribution is to confirm or disprove a hypothesis that the legal framework of the resolution is a complementary element of financial safety net at the financial market, making it necessary to redefine the role of individual institutions that form the current system of ensuring financial stability in Poland and the Czech Republic. The scientific methods of analysis, synthesis, and comparison have been employed.

Japan’s financial regulatory responses to the global financial crisis

2015 ◽  
Vol 7 (1) ◽  
pp. 51-67 ◽  
Author(s):  
Kimie Harada ◽  
Takeo Hoshi ◽  
Masami Imai ◽  
Satoshi Koibuchi ◽  
Ayako Yasuda
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Basel Iii ◽  
Stress Tests ◽  
Content Type ◽  
Bank Supervision ◽  
Otc Derivatives ◽  
The Global Financial Crisis ◽  
Financial Regulatory

Purpose – This paper aims to understand Japan’s financial regulatory responses after the global financial crisis and recession. Japan’s post-crisis reactions show two seemingly opposing trends: collaboration with international organizations to strengthen the regulation to maintain financial stability, and regulatory forbearance for the banks with troubled small and medium enterprise [SME] borrowers. The paper evaluates the responses by the Japanese financial regulators in five areas (Basel III, stress tests, over-the-counter [OTC] derivatives regulation, recovery and resolution planning and banking policy for SME lending) and concludes that the effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Design/methodology/approach – This report evaluates the post-crisis responses by the Japanese financial authorities in five dimensions (Basel III, stress tests, OTC derivatives regulations, recovery and resolution planning and bank supervision). Findings – The effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Originality/value – The paper is the first attempt to evaluate the financial regulatory trends in Japan after the global financial crisis.

OTC Derivatives Clearing, Brexit, and the CMU

2018 ◽  
Author(s):  
Guido Ferrarini ◽  
Davide Trasciatti
Keyword(s):  
Case Scenario ◽  
Worst Case ◽  
Over The Counter ◽  
Otc Derivatives ◽  
Central Counterparties ◽  
Capital Markets Union ◽  
Article 50 ◽  
The Uk ◽  
Market Infrastructure ◽  
The Eu

This chapter contributes to the debate on the future of European over-the-counter (OTC) clearing and relevant infrastructures in light of the Capital Markets Union and its re-configuration after Brexit. It begins by introducing some basic notions about clearing dynamics. It then analyses the available divorce options between the EU and the UK once Article 50 has been triggered, and their impact on clearing particularly in light of the European Market Infrastructure Regulation's equivalence regime. Next, it examines the worst-case scenario that would materialize if UK central counterparties (CCPs) were excluded from the single market, and considers possible network strategies that CCPs could adopt to remedy the consequences of Brexit.

scholarly journals Central Counterparties are Too Big for the European Securities and Markets Authority (Alone): Constructive Critique of the 2019 CCP Supervision Regulation

2021 ◽  
Author(s):  
Romualdo Canini
Keyword(s):  
Financial Stability ◽  
National Level ◽  
The European Union ◽  
Over The Counter ◽  
Prudential Supervision ◽  
Fiscal Responsibility ◽  
Monetary Constitution ◽  
Central Counterparties ◽  
Market Infrastructure ◽  
Single Approach

AbstractOnce seen as the solution to the systemic risk of over-the-counter derivatives, central counterparties (CCPs) have become a source of concern for the financial stability of the European Union (EU). Distress of a single CCP might be transferred to clearing members and others CCPs, thereby endangering EU monetary and fiscal stability. However, the European Market Infrastructure Regulation (EMIR) has left fiscal responsibility as well as day-to-day supervision of EU-based CCPs (EU-CCPs) at the national level, albeit cross-border colleges of authorities can overturn key decisions of national supervisors. The Commission concluded that these supervisory arrangements needed to be reformed because they hamper the development of a single coherent EU approach to CCP supervision. Although the Commission had proposed to centralise EU-CCP supervision in the European Securities and Markets Authority (ESMA), the final 2019 CCP Supervision Regulation seeks to improve EMIR’s ineffective collegial framework by establishing an internal CCP Supervisory Committee within ESMA. Nevertheless, the continuing lack of loss mutualisation would keep on hindering the development of a single approach to EU-CCP supervision. Moreover, the new regulation adds another layer of complexity to the EMIR framework and clashes with the European monetary constitution. If an agreement on loss mutualisation was reached, EU-CCP supervision should be centralised in two EU bodies along objective lines: while the European Central Bank should be tasked with EU-CCP prudential supervision, ESMA should be responsible for EU-CCP conduct of business supervision. This framework would improve EU-CCP supervision and fit in with the current EU governance at once.

A Web without a Center

2018 ◽  
Author(s):  
Peter Knaack
Keyword(s):  
Regulatory Network ◽  
Financial Stability ◽  
Public Governance ◽  
The Public ◽  
Otc Derivatives ◽  
Unilateral Action ◽  
Regulatory Cooperation ◽  
Private And Public ◽  
Legal Barriers ◽  
Global Data

G20 leaders vowed to collect and share OTC derivatives trade data so that regulators can obtain a global picture of market and risk evolution. This chapter employs a network perspective to explain why they have failed to meet this commitment to date. It examines three networks: the OTC derivatives market itself, and those of its private and public governance. The analysis shows that the Financial Stability Board (FSB), the public supervisory entity, struggles to establish itself at the center of the global regulatory network. It failed to act as a first mover in setting global trade identification standards (legal entity identifiers), and it has not been able to establish a core of global data warehouses. This is largely the result of unilateral action by FSB members. In particular, legislators in member countries have undermined FSB-led efforts by refusing to remove legal barriers to transnational regulatory cooperation and, in some instances, by erecting new ones.

The Politics and Practices of Central Clearing in OTC Derivatives Markets

2018 ◽  
Author(s):  
Erin Lockwood
Keyword(s):  
Financial Markets ◽  
Unintended Consequences ◽  
Regulatory Change ◽  
Significant Shift ◽  
Risk Modeling ◽  
Risk Models ◽  
Over The Counter ◽  
Otc Derivatives ◽  
Derivatives Markets ◽  
Policy Shifts

This chapter focuses on the unintended consequences of the post-crisis mandate that over-the-counter (OTC) derivatives be cleared through centralized clearinghouses in an effort to reduce counterparty and systemic risk. Although central clearing has been widely implemented, it has reproduced many of the same characteristics of financial markets that contributed to the 2008 crisis: concentrated risk, moral hazard, and a reliance on faulty risk models. What accounts for the recalcitrance of the OTC derivatives market to a regulatory change? The chapter argues that focusing on the technologies and practices used to govern derivatives markets helps explain the absence of more radical regulatory policy shifts in derivatives regulation. Although there has been a significant shift in who regulates OTC markets, much less has changed at the level of the specific practices that govern these markets, and the chapter examines the continued reliance on netting, collateralization, and risk modeling within clearinghouses.

Becoming the World’s Biggest Market

2018 ◽  
Author(s):  
Irene Spagna
Keyword(s):  
Global Economy ◽  
Global Financial Crisis ◽  
Credit Default Swaps ◽  
Deregulated Markets ◽  
Otc Derivatives ◽  
Regulatory Uncertainty ◽  
Credit Default ◽  
Basic Characteristics ◽  
The Global Financial Crisis

This chapter analyzes the growth of OTC derivatives before the global financial crisis of 2008 and the role of credit default swaps, in particular, in the near collapse of the global economy. It begins by exploring the basic characteristics of derivatives used as risk management instruments by investors to hedge against or exploit the volatility of asset prices. The analysis further reveals that the pre-crisis period was characterized by a broad-based consensus favoring deregulated markets and globally designed private rules. While not always unanimously supported, permissive public regulatory choices were often encouraged by interest group lobbying, the market-friendly views of many domestic authorities, and concerns about regulatory uncertainty and international competitiveness.

Financial Sustainability and Infrastructure Finance

2018 ◽  
Author(s):  
Felipe Carvalho de Rezende
Keyword(s):  
Financial Institutions ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Financial Sustainability ◽  
Infrastructure Finance ◽  
Strategic Role ◽  
Development Banks ◽  
The Global Financial Crisis ◽  
Capital Development

Among the lessons that can be drawn from the global financial crisis is that private financial institutions have failed to promote the capital development of the affected economies, and to dampen financial fragility. This chapter analyses the macroeconomic role that development banks can play in this context, not only providing long-term funding necessary to promote economic development, but also fostering financial stability. The chapter discusses, in particular, the need for public financial institutions to provide support for infrastructure and sustainable development projects. It concludes that development banks play a strategic role by funding infrastructure projects in particular, and outlines the lessons for enhancing their role as catalysts for mitigating risks associated with such projects.

Macroeconomic Shocks and Unconventional Monetary Policy

2019 ◽  
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Emerging Markets ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Spillover Effects ◽  
Macroeconomic Shocks ◽  
Monetary Policies ◽  
Developed Economies

Barely two decades after the Asian financial crisis Asia was suddenly confronted with multiple challenges originating outside the region: the 2008 global financial crisis, the European debt crisis, and, finally developed economies’ implementation of unconventional monetary policies. Especially the implementation of quantitative easing (QE), ultra-low interest rate policies, and negative interest rate policies by a number of large central banks has given rise to concerns over financial stability and international capital flows. One of the regions most profoundly affected by the crisis was Asia due to its high dependence on international trade and international financial linkages. The objective of this book is to explain how macroeconomic shocks stemming from the global financial crisis and recent unconventional monetary policies in developed economies have affected macroeconomic and financial stability in emerging markets, with a particular focus on Asia. In particular, the book covers the following thematic areas: (i) the spillover effects of macroeconomic shocks on financial markets and flows in emerging economies; (ii) the impact of recent macroeconomic shocks on real economies in emerging markets; and (iii) key challenges for the monetary, exchange rate, trade, and macroprudential policies of developing economies, especially Asian economies, and suggestions and recommendations to increase resiliency against external shocks.

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