Is the cultural contact points in the next ' too big to fail "

Is the cultural contact points in the next ' too big to fail "by Sean at TUE 29 Mar Sprackling 2011 16: 35 BST |  Permanent link |  Kosmos regulators have been working for months to "toxic" world of OTC derivative instruments are kept in check box, and the systemic risk of bilateral trade and management of collateral shall be reduced by requiring (Dodd-Frank in the United States, EMIR in the UK) to standardised derivatives are cleared through the clearing house.

The question for me is if we not only concentrates the risk a little further down the food chain, and it seems I am not alone. Manmohan Singh, the IMF has produced a paper that says just that. Abstract says:

"...Recent regulatory efforts, particularly in the United States and Europe, is to reduce moral hazard so that the next financial crisis is not resolved by the taxpayers. This paper looks at the possibility of central counterparties (CCPs) can be too large-to-failure devices in the pipeline. Current regulatory and reforms cannot remove systemic risk from OTC derivatives but rather move them from banks to contact points. Under the current regulatory review, OTC derivatives markets could become more fragmented. In addition, another taxpayer bailout not exclude. Reexamination of the two most important issues of (a) the contact points, interoperability, and (ii) the cost of moving to the focal points of access to central bank financing, indicates that the proposed changes cannot provide
the best solution. The paper suggests that a tax on derivatives liabilities could make OTC derivatmarknaden safer, in particular in the transition to a stable clearing infrastructure. It is also proposed to review of "public utility" model for OTC market infrastructure ... "

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