Newsletter November 2010: Official push for OTC derivative standardisation

BASEL – International standard setters are pushing ahead as fast as possible with plans to reduce the weaknesses in the over-the-counter (OTC) derivatives market that contributed to the build up of systemic risk during the financial crisis. The proportion of the market that is standardised should be “substantially increased,” says a late October report from the Basel-based Financial Stability Board (FSB), the international body tasked with coordinating financial regulatory reform. Authorities should work with market participants to increase standardisation using incentives and, where appropriate, regulation, it says.