Stephen O'Connor, a managing director at Morgan Stanley, said rules from the Basel Committee on Banking Supervision and the U.S. for the over-the-counter derivatives market are likely to increase liquidity because they will reduce risk and encourage trade. "Clearing adds to liquidity in the market, as historically one source of friction was counterparty credit risk. So if that can be taken out of transactions, it can help," O'Connor said. O'Connor added that increased post-trade transparency could reduce liquidity in derivatives trading.
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