Introduction

Sumit Mehta and Simon Wilkinson

In our day-to-day experiences of derivatives markets at various times in the post-Lehman era, we found ourselves constantly facing one difficulty after another when pricing, valuing and trading derivatives as the market came to grips with the multitude of issues thrown up by the post-crisis environment. Initially, these were a result of ill-considered or seemingly insignificant factors that market practitioners had not thought relevant to their everyday business, as can often happen in an industry where liquidity is abundant and profit and loss accounts are healthy.

Through time, it became obvious that what we were increasingly observing was due to formal regulation rather than market participants adapting their pricing models, business models and behaviours. Across this wide range of emerging issues, we found that although the universe of academic papers and regulatory documentation was well-populated, there was very little in the way of help for practitioners searching for guidance in navigating the commercial and quantitative impacts of regulation on the way they do business. In drawing together contributions from derivative experts representing different industries, this is