REG Arb-they may not have it, but it will

In his speech on Tuesday to euro Pariliament Gary Gensler said: "we must continue to work together to get oversight on the swaps market to help prevent the next crisis. Effective reform cannot be carried out by one nation alone. It will require a comprehensive, international reaction. "

(UN?)Fortunately I do not believe that Europeans are listening (or listen). CFTC to all standardized swaps not only cleared centrally, but also pushed to Exchange. But the comments this week by EU lawmakers at the World Congress for Exchange was reported as saying that they do not want to destroy the existing OTC processes. And indeed, in a rare comment letter from the FSA to CFTC in relation to his idea to reduce the capital requirements for membership, the clearinghouse claims that this "mistake" would increase the risk.

Personally I think the Europeans take a more measured approach with a broader remit. CFTC seems to be rushing through Receptacles and demanding that the rest of the world follow suit. EMIR will take longer and (hopefully) more adapted to the needs of the end-user, than Dodd-Frank. But according to a report on regulatory arbitrage JPM released earlier this month, the real winners will be Swiss ....

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