BASEL Regulation on SWAP Market: Fair?

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PrakharT

Joined
9/18/13
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Basel committee has put in more regulations over the SWAP market today. The ramification of this is, according to the banks, it will increase the capital cost to around 92 times.

Now I wonder, is it really good for the economy and for the financial engineer's future prospects. I know more and more jobs are coming in Regulation side but will they compensate for the loss which we can expect in derivative job market as a result of such regulations?
 
Basel regulation or Dodd-Frank regulation? Basel is forcing the standardization of IMM approached to CCP risk. Moving it to exchanges is the really hard part. That's DF.

Fairness has little to do with it. The largely unregulated derivatives market came with attached externalities which were clearly not priced in. Many, if not most of the externalities were related to systemic risk associated with bilateral nature of the OTC market. Title VII may seem heavy-handed, but it addresses real problems the market has had since it's inception.
 
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