Possible initiatives to enhance the resilience of OTC derivatives markets - EU Proposals
The Commission's Communication on ensuring the efficiency, safety and soundness of derivatives markets and the accompanying Staff Working Paper concluded that the way derivatives markets work needs to be improved in order to safeguard financial stability.
Overall, the end-goal of financial stability can be achieved by targeting two intermediate objectives, namely by (i) strengthening counterparty credit risk mitigation and (ii) increasing transparency. In order to achieve these objectives, a number of tools are available that can be applied depending on each market segment's level of maturity.
For the full text of the document visit http://ec.europa.eu/internal_market/consultations/docs/2009/derivatives/...