1 Bubbles are formed because many people believe that the price of the underlying asset will continue to rise into the indefinite future and that they can sell the asset before a change in fortunes occurs. Long durations of bubbles may reflect information asymmetries and costs associated with arbitrage in the form of short-sale constraints.
I would like to spend a few more words on one of these challenges: data harmonisation. The CPMI and the International Organization of Securities Commissions (IOSCO) have set up a group to take charge of developing global guidance for harmonising key OTC derivatives data elements.