Economists question cost benefits of derivatives clearing

New research finds no compelling economic rationale for central clearing

In the money?: "The cost comparison does not consistently favour central clearing" – Paul Glasserman

Central clearing does not provide meaningful cost benefits for derivatives counterparties from either a capital or collateral perspective, according to a pair of leading academics.

"The overall conclusion is that we don't find a strong, if any, capital and collateral cost incentive in favour of central clearing. The main drivers in favour are the netting comparison [against bilateral derivatives trading] and that turns out to be less favourable to central clearing than might have been expected,"