IBFed provides observations on OTC derivatives contracts to regulators – 28/07/10

28 Jul 2010

IBFed has provided evidence to the Bank for International Settlements (BIS) on over-the-counter (OTC) derivatives contracts.  IBFed is aware that this issue is under discussion by regulators worldwide.  In addressing this issue, IBFed believes that regulators should seek consistency and balance with prudential regulation, capital requirements and the future structure of the OTC derivative markets.  In addition, IBFed is generally supportive of the introduction of Central Counterparties (CCP) for OTC derivatives, seeing them as an important means of mitigating risk.  It is important, however, that the Basel framework provides appropriate capital relief for CCP clearing.

Here is the IBFed letter and the observations are available here.