ADVANTAGES OF A CO-REGULATORY OTC DERIVATIVES REGIME

摘要

Much attention has focused upon the apparent lack of regulation of the global OTC derivatives market as one of the major aggravators of the global financial crisis of 2009-2010. Thus, financial regulators worldwide have focused their attention upon these markets, and, in 2009, members of the G20 committed to implementing certain regulatory reforms that would reduce the systemic risk created by the OTC derivatives market. Under the framework envisioned by the G20, each state would implement these common commitments individually on the domestic level. This Note argues that this method of implementation will lead to a regulatory system that fails to achieve the goal of reducing the OTC derivatives market's contribution to global systemic risk. Instead of relying solely on public regulators to implement the commitments, involving the private industry group ISDA in a co-regulatory framework would better enable public regulators to effectively implement the commitments they announced and to achieve the goal of reducing systemic risk.