## United States: Publication of Financial Sector Assessment Program Documentation: Technical Note on Regulatory Reform: OTC Derivatives

_IMF Staff Country Reports, July 30, 2010_

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**Canonical URL:** [United States: Publication of Financial Sector Assessment Program Documentation: Technical Note on Regulatory Reform: OTC Derivatives](https://www.imf.org/en/publications/cr/issues/2016/12/31/united-states-publication-of-financial-sector-assessment-program-documentation-technical-24110)

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## Bibliographic details
- Published: July 30, 2010
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781455206797.002

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### Overview
- OTC derivatives markets were an increasing source of vulnerability heading into the crisis.
- OTC derivatives markets contributed to the financial crisis.
- Credit derivatives facilitated the development and growth of the structured securities markets; and the purchasing, packaging, and distribution of poorly underwritten loans and mortgages.
- The proposed reforms will make major improvements to market trading liquidity and the price discovery process.
- The reversal of the deregulation of OTC derivatives marks a major improvement in regulatory approach, and it closes an important gap in the regulatory framework.

### Key findings
- OTC derivatives markets increased systemic vulnerability prior to the crisis.
- Credit derivatives played a central role in enabling growth of structured securities markets tied to poorly underwritten loans and mortgages.
- Reforms are expected to improve:
  - market trading liquidity
  - the price discovery process
- Re-regulation of OTC derivatives constitutes a significant strengthening of the regulatory framework.

### Policy implications and recommendations
- Reverse deregulatory gaps in OTC derivatives oversight to strengthen the regulatory framework.
- Implement proposed reforms aimed at enhancing market liquidity and price discovery in OTC derivative markets.

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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/united-states-publication-of-financial-sector-assessment-program-documentation-technical-24110_