Regulation of Derivatives Markets Set to Impact Global Financial Stability
Derivatives are financial contracts used to manage risk. The article discusses recent regulations on derivatives markets and the infrastructure supporting them. Derivatives can be traded over-the-counter or in listed markets, with OTC markets relying on dealers for liquidity. Terms of derivatives contracts are negotiated between counterparties to meet specific needs. The key findings include the importance of derivatives in risk management, the different trading mechanisms, and the customization of contracts in OTC markets.