Dual reporting and Expectations theory: Difference between pages

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The prevailing system of reporting under the European Market Infrastructure Regulation<ref> http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:201:0001:0059:EN:PDF</ref> (EMIR), under which both parties to a transaction  are required to report it.
Expectations theory states that the best measure of the market's average expectation of the outturn spot foreign exchange rate at a given future date is the current market forward rate for the same maturity.


Sometimes known as 'DSR' (Dual-Sided Reporting).
Expectations theory also applies in the interest rate market, and indeed in any market where forward prices are quoted.
 
 
The Association of Corporate Treasurers and others are lobbying for a system of single-sided reporting (SSR) of transactions between financial counterparties (FCs) and non-financial counterparties (NFCs), under which only the financial counterparty would be required to report the trade.


So for example in the interest rate market, expectations theory suggests that the current market forward interest rate is the best measure of the average market expectation of the outturn spot interest rate at the given future date.


== See also ==
== See also ==
* [[EMIR]]
* [[Four way equivalence model]]
* [[FC]]
* [[Outturn]]
* [[Legal entity identifier]]
* [[Rational expectations]]
* [[MiFID]]
* [[Yield curve]]
* [[NFC]]
* [[SSR]]
* [[Trade repository]]
 
 
 
== Other resource==
[https://www.treasurers.org/ACTmedia/EMIR_Consulation_Response_August_2015.pdf ACT's EMIR Consultation Response, August 2015]
 
 
===References===
<references />


[[Category:Accounting,_tax_and_regulation]]

Revision as of 14:19, 23 October 2012

Expectations theory states that the best measure of the market's average expectation of the outturn spot foreign exchange rate at a given future date is the current market forward rate for the same maturity.

Expectations theory also applies in the interest rate market, and indeed in any market where forward prices are quoted.

So for example in the interest rate market, expectations theory suggests that the current market forward interest rate is the best measure of the average market expectation of the outturn spot interest rate at the given future date.

See also


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