A new paper has warned some aspects of clearing should not be competitive
Clearing houses that seek to cut collateral fees to win
business could have the opposite effect, according to a white
paper from Eurex Clearing.
In the new regulatory environment which mandates central
clearing of all derivatives, concerns have arisen that
for-profit central counterparties (CCPs) may look to "compete
on risk" by lowering collateral fees to attract customers.
But Eurex Clearing, the CCP for Europe’s
largest derivatives exchange, said strong conservative risk
management standards based on the mutualisation of risk across
various markets and clients are more attractive to market
participants than lower tariffs.
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