Liquidity critical to OTC clearing, argue dealers
Regulators should consider liquidity when deciding which over-the-counter derivatives should be cleared, say market participants
Rather than considering standardisation, regulators should focus more on liquidity when determining which types of over-the-counter derivatives are suitable for central clearing, say dealers.
In September last year, the Group of 20 leading economies called for all standardised OTC derivatives to be centrally cleared and reported to trade repositories by the end of 2012. This idea is now being put into action in the US with the signing of the Dodd-Frank Wall Street Reform and Consumer Protection
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