Global financial regulators have backed away from earlier guidelines that banks had warned would destabilise the $693 trillion derivatives market.

The Basel Committee on Banking Supervision's final rule, released yesterday, will require banks that broker swaps trades to set aside much less money to protect against a default versus a proposal published last year. The plan now applies a minimum 20 per cent risk weighting to money deposited at clearinghouses, down from 1,250 per cent in the original proposal.

The change takes effect on January 1st, 2017.

The prior proposal could have increased costs as much as 92 times, according to calculations by three banks shared with Bloomberg News.

The original rule carried the risk that market participants would flee rather than take advantage of the clearinghouses, making it more difficult for them to safeguard the market. (Bloomberg)