Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book discusses that in the area of financial derivatives, regulation is focused on increasing transparency, strengthening market infrastructure, and reducing systemic risk–these post-crisis regulatory reforms. It contributes to the field, integrating a legal analysis of the regime of Central Counterparties (CCP) with sociological perspectives of risk and its role in 'manufactured risk' markets, such as in the over-the-counter derivatives market (OTCDM). The book identifies areas that have been overlooked by regulators. It explores the approach of the UK regime of CCPs in the OTCDM and the first of its shortcomings, using risk-based regulation as a method for our assessment. The chapter also explores two more shortcomings; namely the insufficient legal framework underpinning CCPs' operations and the absence of a special resolution regime for CCPs. It highlights how the UK regime of CCPs in the OTCDM is not considering the 'innovation risk'.