andreas dombret : global derivatives markets in transition guest contribution by dr andreas dombret, member of the executive board of the deutsche bundesbank, published in the borsen - zeitung on 2 august 2013. * * * the global derivatives markets are close to reaching a turning point. in future, the vast majority of risks associated with over - the - counter ( otc ) derivative contracts will be shifted from market participants to central counterparties ( ccps ). the aim of this regulatory change in market structure is to use ccps as a tool to limit and cushion risks in the derivatives markets. the g20, comprising the 20 main industrialised and emerging market economies, agreed on this as long ago as 2009. their decision has been followed by extensive legislative activity worldwide, with support being given by the financial stability board ( fsb ). the recently found compromise between the us commodity futures trading commission ( cftc ) and the european commission on cross - border derivatives business should be seen as part of this regulatory convergence process. it is proof that, in the regulation of derivatives, policymakers around the globe are pulling together. worldwide, only a small percentage of otc derivatives are at present settled via central clearing. for instance, a mere 13 % of credit derivatives are cleared through ccps. the majority are subject to bilateral clearing agreements between the counterparties. thus, the otc derivative contracts that are traded around the world have led to a network in which a very small number of globally active banks play a major role. in the sub - market for credit default swaps, for example, the ten most important market participants are involved in more than 70 % of all transactions. since the counterparties often cover only part of the counterparty risk associated with these transactions, these market participants in particular are a potential source of contagion risk. counterparty risks can be reduced by relocating them to ccps, which continuously evaluate the open positions of the trading participants and demand a relatively high level of collateral. they can act as a risk buffer because of the extensive financial resources they have at their disposal ; these comprise, among others, the clearing members ’ collateral, a clearing fund, obligations to make further contributions under additional margin calls, and the ccps ’ own funds. according to the eu european market infrastructure regulation ( emir ), in future ccps will even have to be able to withstand the simultaneous default of the two largest clearing members. juggernauts of the financial system at

than in the previous year. this is reflected also in the business plans of the banking system for 2016, where particular banks with a considerable share in crediting, have planned ambitious growth compared to 2015. i hope, and i will insist, seeing this objective materialise in the economy. as i mentioned at the beginning of my address, i would like to invite you to discuss for a new beginning. the conditions are already ripe. the economy is growing, business opportunities are in place, liquidity is ample, and prices are convenient. i urge the banking system to leave behind a relatively passive approach. one should understand that it is time to turn back to the traditional activity of the commercial bank, that is, crediting to economy. this is the mission of commercial banks in the economy and i invite you to fulfil this goal successfully. be no longer hostage of some old practices of failed loans! draw the right lessons and increase the communication with your head offices! explain the albanian reality to them and the opportunities for investment! convince them that there are a lot of activities with guaranteed return, hence they should be credited. i would like to let you know that the management chain of the bank of albania is not satisfied with the current situation. in the meantime, the many reasons or claims that may have risen cannot justify that apathy or lack of risk appetite for investment. we will be increasing our pressure in this regard. i invite you to swiftly take corrective measures to better credit the economy. on the other hand, i urge the business community to raise the level of professionalism in drafting and implementing the projects they submit for crediting. the business should pay great attention to the genuine financial and legal assistance, prior, during and after the signing of the contracts. you should adopt a contemporary management philosophy. the governance of your enterprises should be responsible ; meanwhile it is to your benefit to build realistic projects, in terms of size, location and resources. keep in mind that productivity guarantees high return. do not neglect the research and invest in qualified human resources!. although, they appear as simple pieces of advice, allow me to clarify that the underlying reasons for many unsuccessful practices are exactly the elements i mentioned. i would like to guarantee you that the bank of albania will be a reliable, open and serious partner, in compliance with its mandate, implying its supervisory function. we will continue to improve the legal and sublegal framework to reflect the relevant best standards and european directives regarding the micro and