Equity swaps clearing plans divide industry

Balance sheet constraints are forcing some delta one desks to confront the idea of clearing some of their equity swaps books. But faced with such a diverse universe of equity products and a market rigidly in favour of customisation, dealers and CCPs are facing a tall order

Eric Litvack, Societe Generale Corporate & Investment Banking

Dealers in the equity derivatives market are facing a huge problem. A host of balance sheet constraints on their equity finance desks – from bank levies in the UK and other European countries to the various iterations of the leverage ratio – are restricting their ability to offer instruments such as total return swaps (TRSs) to clients in the scale they previously enjoyed.

There is an obvious, though for some, unpalatable solution at hand to ease the crunch: push some of the more standardised

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

What gold's rise means for rates, equities

It has been several years since we have seen volatility in gold. An increase in gold volatility can typically be associated with a change in sentiment and investor behavior. The precious metal has surged this year on increased demand for safe haven…

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here