Get the balance right: private rights and public policy in the post-crisis regime for OTC derivatives

The reforms introduced since the 2008 financial crisis have left the OTC derivatives market in a state of hybridity, governed by elements of private and public law and with a wide-ranging set of stakeholders. This article explores the implications of this hybridity for the ongoing debate about the recovery and resolution of central counterparties (CCPs) and for rule-making in this area. A conflict of rights analysis is applied to five key policy questions (around framing the rules; tear-up; the resolution trigger; the creditor safeguard and the role of equity holders) and potential legal challenges are explored. On this basis, we propose a set of recommendations for the future regime governing CCP recovery and resolution.