Over-the-Counter (OTC) Derivatives, Central Clearing and Financial Stability

13 Pages Posted: 1 Oct 2015

See all articles by Arshadur Rahman

Arshadur Rahman

Bank of England - Sterling Markets Division

Date Written: September 18, 2015

Abstract

Over-the-counter (OTC) derivatives markets have grown significantly over recent decades, and the United Kingdom is an important international centre for them. These markets facilitate the hedging of risk, but they can also give rise to complex exposures within the financial system. Following the financial crisis, policymakers have promoted reforms to these markets. These include the greater use of central counterparties (CCPs) to ‘centrally clear’ transactions, managing risk within the system. The concentration of risk within CCPs does however highlight other challenges, including the need for supervisory co-operation internationally. Authorities are working to address these issues.

Suggested Citation

Rahman, Arshadur, Over-the-Counter (OTC) Derivatives, Central Clearing and Financial Stability (September 18, 2015). Bank of England Quarterly Bulletin 2015 Q3. Available at SSRN: https://ssrn.com/abstract=2667510

Arshadur Rahman (Contact Author)

Bank of England - Sterling Markets Division ( email )

London
United Kingdom

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