Research Project on OTC Derivatives Market and Financial Transaction Taxes
Professor Alexander led a research project at his Chair on the OTC derivatives market and financial transaction taxes. The collapse of Lehman Brother’s investment bank in 2008 demonstrated major weaknesses in the structure of the over-the-counter derivatives market and the design of OTC derivatives contracts. The European Union and the United States have adopted legislation that would require standardised OTC derivatives contracts to be traded on exchanges and cleared through clearing houses in order to increase transparency and reduce counter-party credit risks and systemic risk in the derivatives markets. This project analysed from an empirical and theoretical perspective the relationship between the spreads on OTC credit default swap contracts on the value and yields of the underlying sovereign bonds issued by European union countries and the bonds issued by large EU-based banking institutions. The project aimed to provide a more thorough understanding of the impact of the proposed requirements to trade and clear OTC credit derivatives on exchanges and clearing houses. The project also examined the proposal by the European Commission for a financial transaction tax and assessed the legal, economic and regulatory implications of its implementation.
Appointment as Specialist Adviser by British Parliament (2011-2012)
Professor Kern Alexander was appointed in August 2011 as Specialist Adviser to the British Parliament's Select Committee on the proposed Financial Services Bill. The Financial Services Bill is major legislation that will restructure the regulation, supervision and governance of British financial markets. Professor Alexander was appointed by the Parliamentary Select Committee to review and scrutinise the proposed legislation. He also assisted the Committee in taking oral and written evidence and making recommendations and proposed amendments to the Bill in a final report published in December 2011. A list of links and related documents is provided here.
Commentary on UK banking regulatory reforms
Kern Alexander has written a series of essays that are commentaries on various aspects of the UK financial regulatory reforms. The essays appeared in a current affairs British politics journal/magazine called 'Parliamentary Brief'