A merger between Deutsche Boerse or ICE and the LSE Group is all about savings through portfolio margining
Portfolio margining is not new or sexy but
its potential to drive savings for banks and reshape the
European derivatives market was writ large when this esoteric
clearing function was cited in late February as a key reason
why Deutsche Boerse wants the LSE Group.
Deutsche Boerse stuck to a familiar script
when outlining the rationale behind its ambitious third bid to
partner its British rival LSE Group, listing "substantial
revenue and cost synergies" and "complementary growth
strategies, products, services and geographic footprint".
But the German exchange went further:
"Deutsche Boerse and LSE believe the potential merger would
offer the prospect of enhanced growth, significant customer
benefits including cross-margining between listed and
over-the-counter (OTC) derivatives clearing (subject to
regulatory approvals), as well as substantial revenue and cost
synergies and increased shareholder value."
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