Transparency and Security in the Derivatives Market: The Brazilian Case
32 Pages Posted: 23 Oct 2016
Date Written: January 20, 2016
The over-the-counter (OTC) derivatives were considered a core cause for the increase of the systemic risk in the global markets, which ended up in the burst of the markets on the financial crisis in 2008. Among the lessons learned, the need to improve the transparency, controls and surveillance of the derivatives markets is a key driver to the structural reforms designed to make the derivatives markets less susceptible to the excesses observed in the period before the peak of the crisis. On this paper we compare the intended configuration for the global derivatives markets after the implementation of the reforms proposed by G20/FSB with the one existent in the Brazilian market since the beginning of this century, showing that the Brazilian derivatives market already presented very high standards of transparency and control. Based on this conclusion, we also propose that the global regulators carefully study the Brazilian case, benefiting from the experience of a market that has been working successfully on this subject for more than 30 years.
Keywords: Derivatives, Swaps, CDS, CDO, Central Counterparty, Trade Repository, Brazilian Market, Risk Management, Financial Market Infrastructure, Systemic Risk, Markets Regulation, Market Transparency
JEL Classification: G1, G2
Suggested Citation: Suggested Citation