ACAPULCO, Mexico, April 26 (Reuters) - Mexican authorities are developing new derivatives rules in line with international standards, which aim to boost transparency and limit risk in the opaque market, Mexico’s central bank governor said on Friday.
Speaking at a press conference in Acapulco, Agustin Carstens said the central bank, finance ministry and bank regulator were discussing plans to improve margin management and counterpart registration.
“Many derivatives imply international operations so it would be desirable for Mexico to adjust to international regulation,” he said on the sidelines of a banking conference.
Risky trading in swaps, a type of derivative, at firms like insurer American International Group helped fuel the 2007-2009 financial crisis which led to multi-billion dollar taxpayer bailouts in the United States and elsewhere.
With memories of that financial crisis still raw, Group of 20 countries agreed in late 2009 that derivatives like interest rate swaps and credit default swaps should be traded on electronic platforms, centrally cleared and recorded, by the end of 2012.
But regulators from different countries have bickered about the best way to tackle regulation of the globalized $640 trillion over-the-counter derivatives market.
A swap is a financial contract in which two parties exchange cash flows on debt, currencies, or other assets, to hedge risk or make a profit.
Carstens did not provide a timetable for the reform but said it would not be included in an expansive financial reform expected to be presented to Congress soon.