Global Markets, National Toolkits: Extraterritorial Derivatives Rulemaking in Response to the Global Financial Crisis


What explains the emergence and continuation of these extraterritorial measures in the regulation of global OTC derivatives markets? This chapter argues that the emergence of extraterritoriality in the regulation of derivatives markets in the US and EU reflects the challenges that regulatory authorities have faced to implement the new prudential agenda in a manner that addresses the highly internationalized nature of derivatives markets. The analysis highlights how the attempt to implement the newly designed post-crisis prudential regulatory frameworks in a manner that pre-empts their hollowing out through regulatory arbitrage has led regulatory authorities to adopt different degrees of extraterritoriality in their regulatory approach. This chapter will illustrate how these concerns can explain why the degrees of extraterritoriality in the post-crisis agenda have varied not only between the rules introduced in the US and in the EU, but also across different regulatory requirements introduced by these two jurisdictions.

Chapter included in the volume “Governing the World’s Biggest Market: The Politics of Derivatives Regulation After the 2008 Crisis”, edited by Eric Helleiner, Stefano Pagliari and Irene Spagna, Oxford University Press 2018