CFTC’s Giancarlo argues for a global swaps regulation

A New Approach to Cross-Border Swaps Reform: One Market, One Regulator, One Set of Rules
Remarks by Chairman J. Christopher Giancarlo at FIA Japan, Tokyo, Japan

It is time to recognize the systemic risk to the global financial system of dividing global markets for institutional commercial risk transfer into a series of limited and divided trading pools based on the inconsequentiality of corporate nationality. The time has come to complete the important mission of global swaps reform in a manner that is harmonious and effective without fragmenting world markets.


Good afternoon. I am delighted to be speaking to you at FIA Japan. I wish to thank Yasuo Mogi, Richard Clairmont and Mike Ross for organizing this year’s seminar. Ear-lier today, I had the great pleasure to meet with JFSA Commissioner Endo and Vice Minister Himino, who I admire enormously.

I am delighted to be back in Japan, and particularly Tokyo. Tokyo is a vibrant, thriving hub of financial, commercial and artistic activity. From the captivating cityscapes to the dynamic culture, the city is an intricate mix of tradition and modernism. It fuses the past and present together like no other place in the world. This city is truly unique.

Tokyo is also one of the command centers of the world economy where innovations in economic, financial and business activities are continually evolving. I believe these innovations are essential for the growth and prosperity of the Japanese and global economy. And it is in the spirit of innovation that I would like to talk to you today. I would like to discuss my proposal to update and improve the CFTC’s cross-border swaps framework, which I will be formally setting out in a white paper to be published in the next few weeks.

In updating the CFTC’s cross-border approach, I aim to achieve three objectives:

to increase the CFTC’s cooperation with other global regulators, like the JFSA, in order to reduce duplicative regulation and redundant supervision;

to rationalize our sometimes overlapping and overly burdensome regulations that have led to higher costs and operational complexity for market participants; and

to reduce dangerous market fragmentation and foster deep and consolidated liquidity pools that are essential to the resiliency and systemic stability of our financial markets.

I believe this approach is not only mandated by the Dodd-Frank Act and an appropriate use of the CFTC’s capabilities and resources, but it will also enhance market health and resiliency in global markets, such as Tokyo, which is a critical global market for swaps trading and clearing. Indeed, in my view, the CFTC and the JFSA regimes share many symmetries – not just with respect to derivatives regulation, but in a greater sense with respect to our shared commitments to the G20 reforms, market integrity and vigor.

The full speech is available at

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