What is, therefore, needed is a more effective use of regulatory policy instruments by supervisory authorities that can help contain procyclicality in risk assessment and the increase in leverage that is characteristic of asset market booms. Pre-provisioning measures during the upswing phase of the cycle and more effective and longer-term oriented risk management can contribute to this end.
CCPs have to adjust their risk management to cope with more clearing members and with accelerating volumes of derivatives to be cleared centrally. CCP clearing is required of market participants; otherwise they have to accept higher capital and collateralisation requirements. Besides, the standardisation of OTC derivatives should make good progress, so that the clearing and trading obligation becomes operational as soon as possible.