Foreword : Correcting market imbalances and minimising over-regulation

Manfred Wiebogen
President ACI The Financial Markets AssociationThe recently announced proposed determination by the US Treasury
Department to exempt foreign exchange forwards and swaps from
sweeping new derivatives rules, specified under the Dodd-Frank Act
was welcomed by both financial and non-financial groups, alike. ACI
regards this development as fundamental for the sustainability and
effective function of stable and liquid (cash) markets.
Concerns that associated costs to introduce centralized clearing
(CCP) of non derivative currency contracts may impair market
participants, in particular the 'buy side' to preserve the
ability to obtain economic pricing for currency risk management,
were justified. Not to mention that CCPs would have increased
concentration risks, as countless transactions would have had to
settle through a few clearing houses.
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