Three main issues warrant specific attention: –  First, at the G20 level, the reform on OTC derivatives;  –  Second, the Basel Committee work for banks (Basel 3);  –  And third, the accounting reforms by the IASB and the FASB. 1.1 One of the most visible regulatory changes is the reform to address weakness in OTC derivatives markets Although they were not at the origin of the crisis, they certainly and conspicuously aggravated systemic stresses in a weakened global financial system. The forthcoming European Market Infrastructure Regulation – commonly called “EMIR” – as well as the Dodd Frank Act is both of paramount importance in order to fulfill the Pittsburgh’s commitments made by G-20 leaders. I see as particularly important the increase in transparency, the prevention of systemic risk, the promotion of financial stability. In order to meet these objectives, both regulations do introduce mandatory reporting of derivative transactions to trade repositories as well as mandatory clearing for eligible standardized transactions. Both regulations do take into account the fact that a mandatory clearing obligation may also increase the systemic importance of clearing houses. Indeed, both regulations introduce more stringent organizational, managerial and prudential requirements in order to ensure that those clearing houses are safe and sound and comply at all times with those requirements. The fact that both regulations are overall consistent and support the same objectives is of crucial importance and it is a first achievement for financial stability.

Niklaus Blattner: Financial market infrastructures facing technological, economic and regulatory challenges Summary of a speech by Mr Niklaus Blattner, Deputy Chairman of the Governing Board of the Swiss National Bank, at the XI AWK Group Financial Services Lunch, Zurich, 20 September 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Smoothly and efficiently functioning financial market infrastructures form the backbone of the International Financial Centre of Switzerland. The future of these infrastructures will largely hinge on trends in Europe, which point to stronger consolidation. However, healthy competition is the prerequisite for investment and innovation incentives in a consolidated stock market and settlement environment. This would also contribute to reducing the existing inefficiencies, in particular with regard to the processing of cross-border transactions. Yet a competitive environment will develop only if market participants can choose freely among the different providers and if the infrastructures are interoperable, i.e. if the providers grant each other and their participants mutual non-discriminatory access. At present, competitive obstacles exist at the technological, economic and regulatory levels. For instance, costs for changing providers are high. Moreover, financial market infrastructures are often operated in “silo” mode – either explicitly or implicitly – with clearing and settlement being handled by only one provider. But silos impede competition. A suitable regulatory framework must therefore be created to strengthen competition.