The reporting requirement for derivative contracts taking effect on 12 February 2014 will implement one of the key lessons learned from the financial crisis and make the derivative markets significantly more transparent, says the Association of German Banks.
Their General Manager Michael Kemmer issued the following statement: "From 12 February 2014, all derivative contracts concluded by companies in the European Union will have to be reported to data collection centres known as trade repositories. This means that, in future, all relevant supervisory authorities worldwide will be able to access all data in this area at any time. For supervisors, it will not only be considerably easier to monitor firms’ individual risks in a targeted manner. They will also be able to maintain a much clearer picture of the risks in the financial system as a whole and thus prevent crises such as those that arose through Lehman or AIG."
Major efforts were undertaken by supervisors, companies and banks to lay the groundwork for the new registration requirement. Trade repositories had to be set up and approved by supervisory authorities, and internationally unique identifiers had to be agreed for all firms and contracts. Each registration requires the completion of 85 data fields.
Kemmer stressed that it was essential to have constructive cooperation and a smooth exchange of information between lawmakers and supervisors around the globe and highlighted the enormous time pressure that trade repositories, banks and supervisors were under to put a number of new processes in place.
Full press release
© Bundesverband deutscher Banken
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