OTC Derivatives Clearing Summit Europe: Collateral squeeze is a danger, says buy-side panel
Buy-side firms argue new regulations will create a collateral squeeze – despite claims by a Bank of England official that the fears are overplayed
New regulations that will force derivatives users to clear standardised over-the-counter derivatives through central counterparties (CCPs), combined with margin requirements for uncleared trades, will put huge pressure on the available stock of high-quality liquid collateral, according to buy-side speakers at the OTC Derivatives Clearing Summit Europe yesterday.
The comments contradicted those made by Edwin Schooling Latter, head of the payments and infrastructure division at the Bank of England
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