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DERIVATIVES: Work needed to spot next crisis 

May 23, 2014
Christopher Whittall, IFR

Regulators and the derivatives industry need to redouble efforts on aggregating and analysing swaps data in order to spot future systemic build-ups of risk in derivatives markets, an audience at the Centre for Economic Policy Studies heard in Brussels.

By the end of 2014, the Financial Stability Board estimates all G20 countries will have complied with the 2009 commitment to report swaps to trade repositories. But there remains widespread concern within the regulatory community over their ability to spot future blow-ups due to cross-border fragmentation and the sheer volume of data being collected.

“Regulators are concerned they may not know how to predict the next crisis. I’m not sure anyone is in the position to say they have the confidence… to know specifically what they’re looking for,” Uzma Wahhab, member of the secretariat at the Financial Stability Board, said on Monday, adding that there was an ongoing FSB project focused on how best to aggregate swaps data.

Read more: IFR

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