A recent international study found that tougher rules for trading in over-the-counter derivatives will deliver economic benefits that outweigh the costs they impose on banks, Bloomberg News reported today. A group of supervisors and central bankers set up by the Bank for International Settlements estimated that when regulators have stricter standards in place, they will boost global economic output by 0.12 percent per year and the potential for financial crises will be reduced. Regulators and banks should try to have the largest number of derivatives trades as possible pass through clearinghouses, the group said. The market for OTC derivatives, which are traded away from exchanges and other regulated venues, should be based around a “modest number” of clearinghouses, the Basel, Switzerland-based group said.
