The International Energy Agency, OPEC and the International Energy Forum organized two days of meetings to discuss the interaction between financial and physical energy markets and the regulation of these markets — see the Financial Times’ coverage here and here.
I was asked to speak on international coordination of regulation. Here are my slides. I took the chance to connect our argument that the costs to end-users depend upon whether increased clearing raises or lowers the aggregate credit risk. Both the physical and the financial markets for oil are global. If reforms are uncoordinated, there is the potential that the clearing system will be fragmented across national boundaries. This fragmentation could frustrate realizing the potential for reducing aggregate credit risk.