Large banks and brokers are struggling to value accurately OTC assets
As regulatory change meets technology
innovation, Rob Gray of Dion Global Solutions looks at the
future of pricing structured instruments in a centrally cleared
world. He also explains the benefits of standardised and fully
automated valuations across all over-the-counter instruments,
regardless of the asset class.
For those immersed in trading structured
products – the world of regulation, squeezed margins
and demanding investors needs no introduction.
The deluge of regulation may have the
ultimate goal of reducing systemic risk, but managing the new
reality is no picnic, specifically for large brokers and banks
attempting to navigate central clearing and exchange trading
for instruments previously traded over-the-counter (OTC).
Previously, change was met by the simple
expedient of more software, more modules, more infrastructure
and more people. However today, tighter trading margins and
squeezed profits mean this is no longer practicable. The
challenge boils down to a simple and much-repeated equation:
doing more with less while managing growing demands for
transparency, responsiveness and auditability.
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