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Archive for: March, 2012

Gary Wright - BISS Research - London | 30/03/2012 | 4278 views

A new Clearing House; new law brings consolidation closer

News that NYSE Euronext is planning to build their own Clearing House for derivatives and is very interesting and a possible indictment of the quality of choice of alternative Clearing Houses in the market. It was obvious that there would be some moves by NYSE Euronext away from LCH.Clearnet as soon as the London Stock Exchange Group increased thei...

Gary Wright - BISS Research - London | 20/03/2012 | 2461 views | 2 comments

The financial inevitability of Clearing House consolidation

In Europe we are blessed (If that’s the right word) with many Clearing Houses. We are told that this provides competition and drives down prices while producing an environment for innovation. Can anyone point out where any of these benefits are accruing? Where is the proof that investors are getting a better economic deal and what was the mos...

Kathleen Tyson-Quah - Granularity Ltd - London | 16/03/2012 | 2788 views

Are CCPs Increasing Risks? Part II

Yesterday's post looked at the big risks in the CCP landscape from simultaneous requirements for mandatory margin, novated contract terms, complex portfolio and collateral valuations, reference data reforms, and default funds. Today we'll look at the competitive differentiators that potential CCP members, sencond tier swaps dealers, and even end u... Tags: Trade execution, Risk & regulation

Gary Wright - BISS Research - London | 14/03/2012 | 2278 views | 1 comment

Who owns what in a CCP default

Clearing Houses are becoming even more important in the markets as regulatory and political change forces OTC into their systems and onto their balance sheets. Who knows if the balance sheets of Clearing Houses will be able to cope? We hope and expect that the regulators and the Treasury will make sure there is enough capital in place or at least a... Tags: Dealing rooms, Risk & regulation

Gary Wright - BISS Research - London | 09/03/2012 | 2296 views | 1 comment

Rating Collateral

One of the major problems in the stabilisation of securities markets is to find a recognised and standard mechanism to rate the quality of collateral. Clearing Houses have their own methods of assessing the quality of the collateral pledged by financial services firms but this has to be more transparent. With global markets intertwined it is imper... Tags: Trade execution, Risk & regulation