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Legal regulation of credit default swaps in the European Union
Abstract.The object of this article is the legal relations that emerge in conclusion of transactions with the credit default swaps. The subject of this article is the combination of legal norms that regulate the peculiarities of conclusion of transactions with credit default swaps in the European Union, the concept of this financial derivative, and its impact upon the global financial crisis of 2007-2009. The credit default swaps (CDS) were initially introduced in the mid 1990’s in the United States for the purpose of hedging the risks of corporations; however, within a short period of time, CDS have become the most popular financial derivatives in the world. The unconscionable and excessive application of CDS played a fatal role in the evolvement of world financial crisis of 2007-2009. In response, the world leaders initiated the elaboration of legal regulation of CDS. The European Commission was responsible for the preparation of the reform in the EU. In 2012 have been adopted the first documents regarding the CDS regulation. The current CDS legal framework is based on the requirements for providing information on certain transactions to the competent authorities of the European Union, adherence to the transparency regime and undergoing the central counteragent clearing processing. The question of legal regulation of CDS in the European Union is relatively new to the Russian science and have not yet received a sufficient coverage. The relevance of this work is defined by the high impact of the indicated financial derivatives upon the global economy. Considering the immense volumes of CDS world market and the popularity of this financial derivative, the materials can be used in formulation of the analogous regulations in the Russian legislation, as well as realization of commercial activity on the financial market.
Keywords: Financial Crisis, Derivative, Short sale, Clearing, Financial markets, European Union, Credit default swap, Central counteragent, Swap, Threshold
Article was received:15-08-2017
This article written in Russian. You can find full text of article in Russian here .