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Structural changes in the framework under which the derivatives market operates today in a global environment are not necessary, a White Paper released by Deutsche Börse and Eurex concludes, although some improvements are possible. Particularly in the OTC segment, increasing operating efficiency, market transparency and enhancing counterparty risk mitigation would help the global derivatives market to function even more effectively.
In contrast to other financial market segments the derivatives market has proven resilient and reliable during recent market turmoil, the paper states. The major economic function of efficient risk allocation is effectively fulfilled and especially the on-exchange segment strengthens financial market integrity with Central Counterparty Clearing Services that provide effective risk management.
White Paper discusses the fundamentals and characteristics of the market as well as the imperatives for its well-functioning.
The paper reveals that the derivatives market has grown by around 24 percent p.a. over the last decade into a size of 457 trn EUR by notional amount outstanding today.