Standardised OTC swaps spice up futurisation fight

Returns of the Mac

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In the contest between over-the-counter interest rate swaps and exchange-traded swap futures, the listed product has two great advantages – it requires less margin to clear, and its standardised terms make the risk fungible. No matter how many times a user trades the same future, it only has a single position on its books, with each transaction adding to, or subtracting from, the risk.

OTC swaps, by contrast, boast liquidity, and some market participants are hoping to keep it that way by aping t

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