Clearing of OTC derivatives via CCPs, the reporting of derivative trade data to trade repositories and the recent proposal by the European Commission to increase transparency for shortselling activities are important steps in the right direction. Second, dealing with financial innovation. Independently of the doubtless benefits of financial innovation, it poses a constant challenge to regulators, supervisors and overseers of financial markets and infrastructures.
The banking business is in a constant state of flux with new financial instruments constantly being developed and traded. New techniques and instruments have been developed, particularly to diversify and trade credit risk, making markets more complex and sometimes less transparent.