Emir Overview

Clearing the way for OTC Derivatives

Focus on EMIR

1. Lessons from the 2008 crisis 2. Detailed presentation of EMIR obligations 3. Timing of EMIR 4. Conclusion

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Lessons from the 2008 crisis

Biggest financial crisis since the Great Depression

 With numerous failures out of which the most famous default events were Bear Stearns (March 2008), Lehman (September 2008) and AIG difficulties.

OTC Derivatives perceived as a factor of the crisis by regulators and market participants OTC derivatives outstanding

 Large opaque markets  Lack of transparency  Implying major systematic risks

$

notional amount EOY 2012: 632,500 billion dollars

†

Lehman

G7 meeting

The G20 assessment (Pittsburgh, September 2009)

 Banks’ excessive risk taking contributed to the crisis  Consumers, depositors and investors should be protected

“Major failures of regulation and supervision, plus reckless and irresponsible risk taking by banks and other financial institutions, created dangerous financial fragilities that contributed significantly to the current crisis. A return to the excessive risk taking is not an option.” (G20 Pittsburgh Declaration)

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Lessons from the 2008 crisis

From Pittsburgh to Washington and Brussels

G20 agreed on 4 major principles All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements.”

Transposition in national law throughout the globe

Dodd-Frank Act (Title VII)

EMIR MiFID II MiFIR

Locally driven initiatives

BCBS (margin requirements)

Transposition in national law of G20 commitments Transposition in national law of Basel committee’s recommendations

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Clearing the way for OTC Derivatives

Focus on EMIR

1. Lessons from...