I also fear that the potential contribution of market discipline to stability in the derivatives markets is not being fully realized because, in our laudable efforts to improve public disclosure, we too often appear to be mistaking more extensive disclosure for greater transparency. This is an issue to which I shall shortly return.
Concentration and market liquidity In recent years, consolidation has reduced the number of firms that provide liquidity to the OTC derivatives markets by acting as dealers in the more standardized or “plain vanilla” contracts.