Global regulators' failure to align efforts to reform the $693trillion derivatives market threatens to undermine economic growth,according to the International Swaps & DerivativesAssociation.

Investors are struggling to adapt to regional differences tochanges agreed by the Group of 20 nations as the industry meets forits annual conference in Munich today. In the U.S. traders havebeen reporting derivatives transactions to data repositories andhave been required to have central clearinghouses back theircontracts since last year, while European regulators are stilldefining the requirements.

Rules introduced after the collapse of Lehman Brothers HoldingsInc. to reduce systemic risk have increased transparency, thoughthey've also made hedging more expensive, according to an ISDAsurvey published yesterday. Legislators say the changes willenhance their ability to monitor risk taking, curb market abuse andmake it easier to identify holdings when a financial institutionfails.