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April 9, 2014

What is the End User Cost Impact of New Regulations on OTC Products? | Billions

Deloitte has a team called the Centre for Regulatory Strategy which has done something interesting, calculating the incremental cost of the new regulations on cleared and non-cleared OTC products.  

Deloitte has a team called the Centre for Regulatory Strategy which has done something interesting, calculating the incremental cost of the new regulations on cleared and non-cleared OTC products.  Their introduction reads:

Over-the-counter (OTC) derivative markets have been subject to significant change as global regulatory commitments become increasingly a reality.  The clearing obligation, new margin requirements, new capital charges for OTC derivative exposures, reporting and other compliance requirements aim at making the market less risky and more transparent, but will increase the costs of OTC derivative transactions.
 
This paper from Deloitte’s EMEA Centre for Regulatory Strategy explores how much more expensive cleared and non-cleared OTC derivative transactions will become as a result of the reform package in the EU,  how the structure of OTC derivative markets is set to change and what strategic challenges arise for firms.
The end result from Deloitte is an estimate that new regulations will pile cost on the users of OTC derivatives to the tune of billions of EUR, the report can be enjoyed over at the Deloitte website or attached below. 

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