BRUSSELS/LONDON - Global regulators launched a consultation with the financial services industry on Friday to shape new rules on how much banks should set aside to cover the risk of default on uncleared derivatives deals in the $648 trillion market.
It is one of the final pieces of a sweeping reform of derivatives markets that world leaders called for by the end of 2012, after derivatives played a central role in the 2007-09 crisis, which led to the collapse of Lehman Brothers.
The proposals will affect trillions of dollars of transactions, bumping up costs for users and leaving smaller financial players out in the cold, while bolstering banks with deep pockets, industry experts said.
The Basel Committee on Banking Supervision and the International Organisation of Securities Commissions consultation aims to identify how much margin or collateral, such as cash or highly-liquid securities, a derivative trader must put by to cover risks.
Just 15 dealers - including BNP Paribas,
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