The Working Group’s OTC study highlights ways in which collective efforts could enhance risk management. 1. Collective action to strengthen market infrastructure  Today’s OTC infrastructure remains decentralized; trades are executed and settled bilaterally. A review of that infrastructure reveals weaknesses or limitations in existing practices. Some of these weaknesses can be, and are being, addressed by individual firms.
Other weaknesses require cooperation and collective action by firms. For example, firms could reduce risk and increase efficiency as they improve their individual back office procedures. Risk could also be reduced through centralized mechanisms to execute and settle trades. Regulatory, legal, and operational barriers currently prevent some of these mechanisms from being used.