CFTC Chair J. Christopher Giancarlo called for a reexamination of G-20 swaps market reforms and improvement of cross-border central clearing counterparty ("CCP") supervision.
In remarks before the Association of German Banks, Mr. Giancarlo asserted that greater cross-border regulatory harmonization is needed, and reiterated his criticism of proposed EU legislation that would subject U.S. CCPs to overlapping EU regulation.
Mr. Giancarlo described global derivatives market reforms first contemplated at the 2009 Pittsburgh G-20 Summit. He urged regulators to reexamine their actions since then in light of the experience of the past four years of swap regulation. In particular, Mr. Giancarlo said that he "do[es] not subscribe to the 'race to the bottom' thesis of comparative regulation," and argued that regulators "have a duty to apply broad policy prescriptions in ways that enhance markets and their underlying vibrancy, diversity and resiliency." Mr. Giancarlo urged regulators to review past policy determinations against current market dynamics and potential future changes and technological innovation.
Mr. Giancarlo highlighted the recommendations he (along with CFTC Chief Economist Bruce Tuckman) made in a recent white paper urging swaps markets reforms on (i) CCP oversight, (ii) swap data reporting, (iii) swap execution rules, (iv) swap dealer capital rules and (v) end-user exceptions from mandatory clearing and margin. (A more detailed discussion of Mr. Giancarlo's white paper is available on the Cabinet here.)
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