Push for machine-readable contracts poses problems

Rise of the machines

In an ideal scenario, the over-the-counter derivatives market would run like a well-oiled machine. The majority of contracts would be traded and confirmed electronically, and be automatically farmed out to a central counterparty for clearing and settlement. Key transaction data would then be filed with repositories – giving global regulators a complete and readily available set of records that could be used to spot any increase in systemic risk. That’s the world envisaged by the Dodd-Frank Act