Regulators edge towards opt-in fix for OTC stays issue

Authorities from five countries talk swaps and bank resolution at closed meeting

federal reserve
The Federal Reserve in Washington, DC

Regulators looking for a way to avoid mass close-out of over-the-counter derivatives contracts in the event of a big bank defaulting – a phenomenon that could undermine attempts to resolve the institution – are said to be edging towards the so-called opt-in approach, in which the counterparties to a trade would choose to follow resolution rules laid out in a particular jurisdiction. Those rules would postpone – or stay – the ability to close out the trade. The issue wa