In order to improve transparency and avoid build up of a financial crisis, a Reserve Bank panel today suggested tighter norms for reporting and monitoring of interest rate and forex derivatives.
The report of the Working Group set up by the Reserve Bank suggested that Clearing Corporation of India (CCIL) should be made the repository of all interest rate and forex derivative transactions.
The report, on which RBI has invited comments from the stakeholders by June, underlines the “need for consolidation of reporting arrangement with a view to improving the transparency of the market, facilitating its comprehensive monitoring by the regulator and improving the efficiency of post trade processing infrastructure”.
Non-transparency of the over-the-counter (OTC) market, the report said, “results in buildup of risks in the system which is widely believed to be one of the contributory causes of the recent financial crisis”.
