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Risk Management

Derivative trading rules will not reduce risk

"The theory behind the post-crisis regulatory overhaul of derivatives trading is about to become practice, and concerns are growing that systemic risk will simply be transferred rather than backstopped.

"In the aftermath of the Lehman Brothers collapse in 2008, global regulators pressed for more of the $700tn over-the-counter (OTC) derivatives trades to be backed by collateral, or insurance, to give counterparties more assurance about their trades in a default.