At the first G20 leaders’ summit on the crisis (Washington, D.C.), governments agreed on shared principles to strengthen financial regulation and supervision. A major goal was to address weaknesses exposed by opaque, lightly regulated markets—especially in complex instruments such as over-the-counter (OTC) derivatives. This set the political starting point for later, more specific derivatives reform commitments.
At the April 2009 G20 London summit, leaders agreed to expand and re-establish the Financial Stability Forum as the Financial Stability Board (FSB). The FSB was designed to coordinate global financial reform work, including standards and follow-through on agreed commitments. This created an ongoing international mechanism to track progress on derivatives reforms across countries.
At the September 2009 G20 Pittsburgh summit, leaders made a headline commitment for OTC derivatives reform. They agreed that standardized OTC derivatives should be centrally cleared (through central counterparties) and, where appropriate, traded on exchanges or electronic platforms by end-2012, and that OTC derivatives should be reported to trade repositories. This commitment became the benchmark for major U.S. and EU reforms over the next several years.
The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law, and Title VII set a new regulatory framework for swaps (and related "security-based swaps"). It gave the CFTC primary authority over swaps and the SEC authority over security-based swaps, and it directed major reforms such as clearing, trading requirements, and reporting to data repositories. This law became the central U.S. vehicle for implementing the G20 derivatives commitments.
In November 2010, the G20 endorsed the Basel Committee’s new capital and liquidity standards known as Basel III. While Basel III is broader than derivatives, its tougher capital framework supported the post-crisis direction of policy by increasing incentives to reduce systemic risk, including through safer handling of counterparty exposures. This complemented the push toward central clearing and stronger infrastructure around derivatives markets.
The European Parliament advanced a proposed EU regulation focused on OTC derivatives, central counterparties (CCPs), and trade repositories. The text explicitly tied the EU initiative to the 2009 G20 Pittsburgh commitments on clearing and reporting. This legislative step helped move the EU toward an EMIR framework parallel to the U.S. approach under Dodd-Frank.
International standard-setters (CPSS and IOSCO, hosted at the BIS) published the "Principles for Financial Market Infrastructures" (PFMI). These principles set stronger global risk-management standards for core market plumbing, including CCPs and trade repositories—key institutions used in the post-crisis move toward central clearing and centralized reporting. PFMI provided a common yardstick regulators could use when overseeing infrastructure that supports derivatives markets.
The EU adopted the European Market Infrastructure Regulation (EMIR), Regulation (EU) No 648/2012, creating EU-wide rules for OTC derivatives. EMIR established core requirements such as central clearing for certain standardized OTC contracts, reporting derivatives to trade repositories, and risk-mitigation measures for trades not centrally cleared. This aligned the EU’s regulatory approach with the G20 goal of reducing systemic risk and increasing transparency.
EMIR became applicable across EU member states, bringing its framework into effect without needing separate national laws. This marked the operational start of major EU post-crisis derivatives reforms, including the creation and supervision of trade repositories and stricter standards for CCPs. It also laid the groundwork for later detailed technical standards and phased-in obligations.
The CFTC issued a final rule requiring central clearing for specified classes of interest rate swaps and credit default swap indices. The rule set an effective date in early 2013 and phased compliance by category of market participant. This was a major shift from the pre-crisis model of bilateral (two-party) OTC exposures toward centralized risk management through regulated clearinghouses.
The G20’s end-2012 deadline was a political milestone for having standardized OTC derivatives centrally cleared and (where appropriate) traded on platforms, with contracts reported to trade repositories. In practice, implementation was uneven and phased in over time, with legal rules and market infrastructure still being built out across jurisdictions. Even so, by this point the overall direction was clear: more clearing, more reporting, and tighter oversight of derivatives markets.
The CFTC finalized rules for Swap Execution Facilities (SEFs), a new category of regulated trading venue for swaps. These rules supported Dodd-Frank’s goal of moving certain swap trading onto more transparent, regulated platforms rather than relying primarily on private bilateral dealing. The compliance date later in 2013 began the shift in how many standardized swaps were executed and displayed to the market.
The EU adopted MiFID II (Directive 2014/65/EU) and MiFIR (Regulation 600/2014) as a major overhaul of market structure rules. Among other changes, this package supported stronger transparency for non-equity instruments and helped frame later EU "trading obligation" rules affecting some derivatives. Together with EMIR, it rounded out the EU’s post-crisis reforms by addressing not just clearing and reporting, but also where and how trading occurs.
Regulation and Reform of Derivatives After the 2008 Financial Crisis (2008-2014)