In an interesting letter in today’s FT, Roger Liddell, CEO of LCH.Clearnet raises the issue about global clearing houses vs localised clearing houses. The problem with the way the debate is going on future regulation is that each region is developing different models. If this continues we run the risk of the current global market in all sorts of products being fragmented into competing blocs. This will not be a good thing for the industry.
Roger succinctly concludes in his letter:
“As regulators and policymakers rightly seek to reform the financial system it is essential that the vital issue of reducing systemic risk does not become hostage to narrow commercial interests seeking to take advantage of the concerns engendered by this crisis. Systemic risk is a global issue and requires a global approach from policymakers and supervisors”.