Asia’s share in the $648 trillion over-the-counter (OTC) derivatives market, currently at around 8%, is expected to grow significantly in the coming years. The region’s ability to manage the risks often associated with these instruments will play an important role in protecting the Asian markets from repeating the mistakes of other financial centres. The regulators have clearly watched this drama unfold and have already begun taking action on this front.
The 2008 crisis showed that the then-opaque nature of OTC derivatives could lead to market participants and regulators overlooking excessive levels of risk in the system. A key lesson from the crisis emerged well before the dust had settled: to effectively manage systemic risk, regulators need transparency into the market.
Download the Congressional Testimony: Trade repositories key to understanding exposures and flagging hazardous market activities