Primes push synthetics as Basel III bites

Synthetic benefits

Basel III tips balance in favour of synthetics

The heads of business in the world’s largest banks face a common problem. Tougher regulations that increase capital and liquidity ratios for global banks are forcing a rethink of capital-intensive businesses. The goal of every business head these days is to grow revenues while simultaneously shrinking their risk exposure, balance sheet usage and capital consumption. Prime brokerage is no exception.

The capital and liquidity requirements of Basel III have made life harder for prime brokers. The c