CME faces questions over pending swaptions service
The interest rate swaptions market – bifurcated and largely illiquid – will not be easy to drag into clearing houses, although the benefits could be huge. CME Group hopes to launch a service, but dealers are viewing it with caution
They are tried and tested products, with a broad, loyal user-base, but when it comes to clearing, interest rate swaptions have so many quirks that one dealer describes them as "toxic waste". Buy-side demand focuses on European-style swaptions, leaving dealers structurally short on that portion of the market. In turn, dealers balance their portfolios using Bermudan-style or mid-curve swaptions
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 print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Contract negotiation tops tech sovereignty for banks in Asia
Regulatory pressure is rising, but industry still focused on service agreements with third parties
The SaaSpocalypse shows private markets need risk models
Investors have little idea how bad the losses in private credit are going to be
Crisis? Which crisis? How ECB stress test failed to see Strait
Banks were told to design geopolitical shock scenarios, but some focused mainly on tariffs
G-Sib capital surcharge: how indexing and averaging alter incentives
Capital risk strategist anticipates Basel III endgame impact on US big-bank behaviour
The race to model private market risks
BlackRock maps holdings to risk factors; competitors aim to get the best from statistical methods
Doubts linger over start date for 24-hour US stock trading
NSCC will be ready in June, but questions remain over corporate actions and circuit breakers
Waiting for the light: what’s stalling European equity markets?
Esma says EU market has a structural problem, but the focus on lit vs dark trading overlooks post-trade issues
ECC risk chief says Iran crisis will not delay VAR transition
Incorporating 2022 Ukraine shock ensured new margin model is robust in face of energy volatility
