Keywords
derivatives, swaps, Dod-Frank
Abstract
Though over a year has passed, the impact of the Dodd Frank Act remains unclear. This Note examines the provisions of the Act that relate to swap transactions within the context of pre-reform and postreform markets. In order to reduce the uncertainties inherent in unregulated swap transactions, the Act employs a comprehensive framework, which includes mandatory clearing through derivative clearing organizations, extensive reporting requirements, margin requirements, and position limits. This Note argues that, in doing so, the Dodd Frank Act addresses the fundamental failures of pre-reform derivative markets. However, the importance of the role for derivative clearing organizations under this framework creates a risk that these organizations will become systemically significant, mirroring problems with under-capitalized and over-exposed financial institutions in the downturn.
Recommended Citation
Eduard H. Cadmus,
An Altered Derivatives Marketplace: Clearing Swaps Under Dodd-Frank,
17 Fordham J. Corp. & Fin. L. 189
(2012).
Available at: https://ir.lawnet.fordham.edu/jcfl/vol17/iss1/5