Regional swaps booking replacing global hubs

Given a free choice, banks would probably book all of their trades in a global hub. But growing supervisory concerns, plus shifting rules around swaps clearing and execution, bank resolution, capital and liquidity are producing a more fragmented – and possibly less efficient – model

The central hub model is under threat

Two foreign banks with big London offices recently spoke to the Prudential Regulation Authority (PRA) about their derivatives-booking practices and came away with very different messages.

The first bank believes the PRA wants overseas trades moved out of the UK, which would close the chapter on London's long history as the world's derivatives hub, while the second thinks the supervisor is happy for banks to continue remotely booking trades into the country.

"We have heard explicitly that the PRA

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