Perfect Storm of Market and Regulatory Factors Takes Shape

A “perfect storm” of market and regulatory factors is taking shape that promises to exert a profound influence on the way risks are managed and supporting capital is deployed in our interest rate markets. The subprime mortgage crisis that came to a head in 2008 was the catalyst for a major regulatory reexamination of supporting capital requirements for derivatives instruments including futures and over-the-counter (OTC) swap instruments.

Two major results of this reexamination process are found in the Dodd-Frank legislation and new capital standards for international banks per the Basle III reforms. Read the article to learn about these, in detail.