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Full-Text Articles in Law
The Fsa, Integrated Regulation, And The Curious Case Of Otc Derivatives, Dan Awrey
The Fsa, Integrated Regulation, And The Curious Case Of Otc Derivatives, Dan Awrey
Cornell Law Faculty Publications
With a view to better understanding the optimal structure of financial regulation, this paper tests prevailing theoretical hypotheses respecting the efficiency and overall desirability of integrated financial regulation relative to competing institutional models. This test is conducted through the lens of a comparative case study examining the approaches adopted by (fragmented) U.S financial regulators and the (integrated) UK Financial Services Authority (FSA) toward the myriad of regulatory challenges posed by the emergence, growth, and systemic importance of over-the-counter (OTC) derivatives markets. More specifically, this paper examines why, despite the numerous theoretical advantages of integrated regulation, the FSA adopted a non-interventionist …
Guilty By Association? Regulating Credit Default Swaps, Houman B. Shadab
Guilty By Association? Regulating Credit Default Swaps, Houman B. Shadab
Articles & Chapters
A wide range of U.S. policymakers initiated a series of actions in 2008 and 2009 to bring greater regulation and oversight to credit default swaps (CDSs) and other over-the-counter derivatives. The policymakers’ stated motivations echoed widely expressed criticisms of the regulation, characteristics, and practices of the CDS market, and focused on the risks of the instruments and the lack of public transparency over their utilization and execution. Certainly, the misuse of certain CDSs enabled mortgage-related security risk to become overconcentrated in some financial institutions.
Yet as the analysis in this Article suggests, failing to distinguish between CDS derivatives and the …
Introduction: The Market Meltdown Of 2008 And The Future Of Financial Reregulation [Article], Faith Stevelman
Introduction: The Market Meltdown Of 2008 And The Future Of Financial Reregulation [Article], Faith Stevelman
Articles & Chapters
No abstract provided.
Counterparty Regulation And Its Limits: The Evolution Of The Credit Default Swaps Market, Houman B. Shadab
Counterparty Regulation And Its Limits: The Evolution Of The Credit Default Swaps Market, Houman B. Shadab
Articles & Chapters
Over-the-counter (OTC) derivatives are widely regarded as “unregulated” financial instruments. While it is true that OTC derivatives are subject to relatively minimal federal regulation, OTC derivatives are in fact subject to a robust form of control and governance in the form of counterparty regulation. Counterparty regulation arises when two or more parties are continually exposed to counterparty credit risk for the duration of a long-term contract, and it consists of specific governance mechanisms such as the daily adjustment of collateral and the netting out of redundant trades. Counterparty regulation governs derivatives transactions but not securities transactions.
This essay reviews recent …