Dealers face fragmentation costs in OTC clearing’s Big Bang

With central counterparties springing up all over the globe, dealers are becoming increasingly resigned to the break-up of netting sets – particularly if regulators favour their local clearers. Interoperability is a potential solution, but not a simple one. Duncan Wood reports

Michael Davie

According to the Big Bang theory, all matter in the universe was originally densely squashed together, prior to a burst of ultra-fast cosmic inflation – a vast explosion of space – that gave birth to planets, stars and clouds as gravity exerted itself. The universe continues to expand, more slowly, today. But a more contentious theory suggests gravitational attraction will one day stop and then reverse this expansion, in a process dubbed the Big Crunch – stars and worlds will collide and