Bitcoin spot and derivatives markets: Searching for completeness

2020 ◽  
pp. 1-13
Author(s):  
Helyette Geman ◽  
Henry Price
Keyword(s):  
Derivatives Markets

The Politics and Practices of Central Clearing in OTC Derivatives Markets

2018 ◽  
Author(s):  
Erin Lockwood
Keyword(s):  
Financial Markets ◽  
Unintended Consequences ◽  
Regulatory Change ◽  
Significant Shift ◽  
Risk Modeling ◽  
Risk Models ◽  
Over The Counter ◽  
Otc Derivatives ◽  
Derivatives Markets ◽  
Policy Shifts

This chapter focuses on the unintended consequences of the post-crisis mandate that over-the-counter (OTC) derivatives be cleared through centralized clearinghouses in an effort to reduce counterparty and systemic risk. Although central clearing has been widely implemented, it has reproduced many of the same characteristics of financial markets that contributed to the 2008 crisis: concentrated risk, moral hazard, and a reliance on faulty risk models. What accounts for the recalcitrance of the OTC derivatives market to a regulatory change? The chapter argues that focusing on the technologies and practices used to govern derivatives markets helps explain the absence of more radical regulatory policy shifts in derivatives regulation. Although there has been a significant shift in who regulates OTC markets, much less has changed at the level of the specific practices that govern these markets, and the chapter examines the continued reliance on netting, collateralization, and risk modeling within clearinghouses.

Regulate in Haste, Repent at Leisure: Private and Public Orderings in OTC Derivatives Markets

2020 ◽  
Author(s):  
Craig Pirrong
Keyword(s):  
Financial Crisis ◽  
Functional Approach ◽  
Over The Counter ◽  
Otc Derivatives ◽  
Private And Public ◽  
Derivatives Markets

Over-the-counter derivatives were widely blamed for causing or exacerbating the financial crisis. As a result of perceived structural failings in these markets, legislators and regulators mandated substantial changes. The most notable of these changes was a requirement that most derivatives be centrally cleared. Under clearing, a central counterparty becomes a party to all contracts and guarantees performance on them. These mandates were predicated on a defective understanding of the economics of derivatives markets. The proposed reforms were fundamentally flawed because they were rooted in an institutional, rather than functional, approach to regulation.

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