Totem poll: users of Markit service call for change

Markit's Totem service has been providing valuations in illiquid inflation derivatives products for the past 11 years, but the recent launch of central clearing for inflation swaps has revived concerns about its valuation methodology


The derivatives market has learned a lot about consensus pricing and benchmarking as a result of the Libor scandal, so it might be surprising to hear critics of Markit's valuation service - Totem - alleging Libor-like design flaws. As with the disgraced interest rate benchmark, the output of the service is a value derived from participants' estimates, after both ends of the range have been lopped off. Outlier contributors are not shown the result, which – critics claim – encourages users to

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