John Kiff, Senior Financial Sector Expert, IMF.
Risk: Can you start by giving an overview of your presentation/panel in Risk Derivatives Clearing conference?
My intention will be to provide the view from the official side on CCP recovery and resolution policies. These include central bank CCP backstopping and dealing with CCP losses that run through their own and clearing member committed capital and resources. IMF staff are very active in the various policy fora, including the FSB, and global standard setters such as the BCBS, CPMI, and IOSCO. Also, a number of us have published papers on the topics I plan to cover here, including rightsizing the CCP's own capital contribution.
Risk: In your opinion, have regulators achieved what they wanted in the 2009 G20 commitments? What would be on your wish list for regulators?
At the 2009 Pittsburgh Summit G20 leaders called for completion of the reform process by end-2012. But more than two years after the deadline, no jurisdiction has fully implemented any of the reforms and some countries haven't even started. So the answer to the first question is no.
Basically the legislative and regulatory processes required to implement the reforms turned out to be more complex than anticipated. But progress has been made on central clearing. More than half of all interest rate derivatives and about 40 percent of credit derivatives for which active central counterparties exist are centrally cleared.
However, the process could be smoother if all national authorities look beyond national interests in their reform efforts. Although G-20 leaders have called for country authorities to find ways to defer to each other's regulations, regulatory inconsistencies and frictions between countries have caused a needlessly rockier road.