By Huw Jones
LONDON, Sept 15 (Reuters) – Differences between new European Union and U.S. rules to crackdown on derivatives will be a key test of how well transatlantic regulators can coordinate to iron out loopholes banks may be tempted to exploit.
The United States has already approved a law to tighten supervision of the $615 trillion off-exchange derivatives markets and the EU published its own draft law on Wednesday.
Both implement pledges the EU and United States made as members of the Group of 20 countries (G20) to require central clearing of as many contracts as possible, reporting of trades to repositories and where appropriate, trading on an exchange.
“The crunch item to get right is for trade repositories to make sure every regulator has access to all the data they have,” said Damian Carolan, a partner at Allen & Overy law firm.
“I don’t think there are any massive showstopper obstacles and there is enough recognition for third country solutions,” Carolan added.