Moreover, an uneven regulatory level playing field could create scope for regulatory arbitrage and provide disincentives for the use of market infrastructure. As a concrete example for necessary regulatory attention, let me mention the risk management standards for the bilateral clearing of OTC derivatives.
While – as mentioned before – in principle OTC derivatives should be centrally cleared to the extent possible, some products are not suitable for central clearing, for instance owing to insufficient product standardisation, lack of market liquidity or limited availability of robust prices.