Under the proposed rules, the moststringent margin requirements would apply to derivatives contracts between swap dealers or other major swaps market participants, as such arrangements could otherwise involve a risk of “default chains” in which distress at one major firm could cascade through the swap markets. As I mentioned earlier, the macroprudential approach to financial regulation is gaining increasing adherence internationally.
Along with our efforts to implement reforms domestically, the Federal Reserve has for some time been working closely with foreign counterparts to help coordinate the reform process at the international level. The objectives of international coordination are of the highest importance.