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Reforming OTC markets: the politics and economics of technical fixes

Morgan, Glenn 2012. Reforming OTC markets: the politics and economics of technical fixes. European Business Organization Law Review 13 (3) , pp. 391-412. 10.1017/S1566752912000286

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Abstract

The paper focuses on financial transactions, addressing over-the-counter (OTC) trading of derivatives, which many analyses of the recent financial crisis argue produced significant problems. This area of financial activity grew massively from the 1990s, facilitated by legal developments in both the US and the UK that ruled out any state regulation of the market whilst at the same time affirming that the contracts made in the area were fully legally enforceable in US and UK law. At the same time, the private association, the International Swaps and Derivatives Association (ISDA), developed the Model Contract and international private soft law agreements that were generally respected by national legal systems and provided an agreed framework for OTC contracts. The paper explores how this lack of public regulation was legitimated, and the interests which lay behind this legitimation process. It then considers how the financial crisis and the role of OTC derivatives forced a re-opening of the issue of how these markets should be regulated. The paper explores the interplay between what may be described as technical fixes to regulatory problems, on the one hand, and the efforts of private and public actors to defend their interests by shaping the new markets in particular ways, on the other.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HG Finance
K Law > K Law (General)
Uncontrolled Keywords: regulation; over-the-counter derivatives; financial crisis
Additional Information: Pdf uploaded in accordance with publisher's policy at http://www.sherpa.ac.uk/romeo/issn/1566-7529/ (accessed 25/02/2014).
Publisher: Cambridge University Press
ISSN: 1741-6205
Date of First Compliant Deposit: 30 March 2016
Last Modified: 05 May 2023 00:58
URI: https://orca.cardiff.ac.uk/id/eprint/52415

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