A European regulatory official let slip this week that new rules requiring central clearing of OTC derivatives are meant to kill the market altogether. Speaking at a conference hosted by Risk magazine in London, Giuseppe Insalaco, senior adviser on clearing and settlement regulation at the Central Bank of Ireland, said, “We are trying to push OTC to futures as much as we can,” according to Risk. “The signs are all there. It is not a secret.”
Further rattling other regulators on the panel by letting this widely suspected but never openly acknowledged cat out of the bag, Insalaco said:
“I think what regulators are bringing about is something akin to a new Ice Age. London will be under a new ice sheet and there will be mammoths in France, but people are trying to figure out how to protect their rose-beds from frost. This is not the point. The point is we want to change how things are done, because the way they were done before is clearly wrong.”
According to Risk, other speakers said they had received “slightly different messages” from other regulators.