3.3 Stock market and financial infrastructure The crisis has shown that the financial markets also need robust structures for settling transactions. Widespread OTC trading in derivatives creates a situation devoid of transparency and lacking reliable hedging. Establishing central counterparties for settling derivatives transactions is the way forward. Such clearing houses could be provided by existing operators of futures exchanges. Introducing such intermediaries would make derivatives trading less precarious(i.e. if one market actor fails, negative effects on other market participants and the whole market can still be avoided) as well as making the risks involved more transparent. Central settlement instances would also open up the possibility for supervisory authorities to gain a comprehensive insight into the market, which is not possible with bilateral trading. In order to allow settlement via clearing houses, financial derivatives would have to be largely standardised. Furthermore, traders would have to supply the clearing house with adequate securities. Here it must be ensured that these new infrastructures are available not only to large market participants, but that efficient access is also guaranteed for smaller market participants. 3.4 Liquidity rules Turbulence on the money and capital markets has underlined the significance of efficient liquidity risk management for the stability of individual banks and for the whole financial system. At the moment at the international level there are no uniform standards of regulatory oversight of liquidity risk. The new rules – especially the proposals of the Basel Committee – represent the first step towards a regulatory standard for managing liquidity risk. The rules provide above all for larger liquidity reserves at the banks to allow them to survive short-term stress periods without running into liquidity shortages. Banks would also have to test much more frequently the extent to which particular market dislocations would lead to refinancing problems. 8