OTC derivatives: ensuring safe, efficient markets that support economic growth

In 2009, the G20 committed to strengthening the financial system and improving the over-the-counter derivatives markets by increasing regulatory transparency and reducing credit risk. Three years on, the industry is delivering, with significant progress made in increasing usage of central clearing facilities and in nearly universal centralised trade reporting by dealers. Today, however, the global financial system and market participants face new challenges and risks. Proposed collateral requirements for non-centrally-cleared derivatives may be pro-cyclical and exacerbate, instead of alleviate financial market stress. Short-selling and other restrictions threaten prudent risk management and investment in the European economy. Overcoming these challenges is important to ensuring robust, stable financial markets, as well as a strong,growing and productive economy.