Politically motivated reform creates new risk

Many of the proposed reforms in derivatives market regulation were driven by politics rather than economics. This could lead to an additional source of systemic risk and less effective risk management among end-users, argues David Rowe

It has been said that nothing is more frightening than ignorance in action. If so, then some aspects of the new global consensus on the reform of derivatives market regulation should frighten us to death. Sadly, much of the pressure for regulatory change has been driven by political rather than economic motivations. In all too many cases, secondary effects have been brushed aside or simply not