April 26, 2018

CFTC published whitepaper on swaps regulation, which the CFTC Chairman J. Christopher Giancarlo co-authored with CFTC Chief Economist Bruce Tuckman. Mr. Giancarlo unveiled the white paper at the annual meeting of International Swaps and Derivatives Association (ISDA). The whitepaper analyzes the range of academic research, market activity, and regulatory experience with the current implementation of swaps reform by CFTC.

The whitepaper comprehensively examines the areas of swaps' central counterparties (CCPs), swap reporting rules, swap execution rules, swap dealer capital, and end-user exception. It explores and considers a range of improvements to the current reform implementation that is pro-reform, aligned to Congressional intent, and better balances systemic risk mitigation with healthy swaps market activity in support of broad-based economic growth.

The authors seek to optimize the implementation of Dodd-Frank Act by CFTC, with the aim to strike a balance between systemic safety and stability and market vibrancy and economic growth. They explain that financial regulators have a duty to apply the policy prescriptions in ways that enhance markets and their underlying vibrancy, diversity, and resiliency. That duty also includes the responsibility to review past policy applications continuously to confirm that they remain improved for the purposes intended. It further includes anticipating changing market dynamics and the impact of technological innovation. 

Keywords: Americas, US, Banking, Securities, Swaps Reform, Systemic Risk, CCPs, Reporting, CFTC Roadmap, CFTC

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