Chapter 45
OTC – Derivative Market
Outline
The Over-the-Counter Derivatives Market
Regulatory Infrastructure for OTC Derivatives
Issues Under the Proposed Regulatory Infrastructure for OTC Derivatives
Sizable collateral requirements
Unbundling of netted positions
Adverse impact on risk management
Concentration of systemic risk via ‘risk nodes’
Central Bank backstop (or taxpayer bailout)
An Alternative to the CCP Route: Taxing Derivative Liability Positions
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