Reforming the over-the-counter derivatives market: what’s to be gained?
Abstract: While derivative financial instruments have made the hedging and exchange of risk more efficient, the recent crisis showed that they also pose a substantial threat to financial stability in times of systemic turmoil. Underlying much of this threat is the lack of transparent reporting in the over-the-counter market for these instruments. This Commentary discusses the advantages of one solution to the transparency proble: moving the settlement or trading of derivatives to exchanges or clearinghouses.
File format is application/pdf
Description: Full text
Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Commentary
Publication Date: 2010
Issue: JulOrder Number: 6