Sovereigns urged to clear OTC trades

Jul 17, 2012

OTC derivatives trades that are not centrally cleared are likely to cost more than cleared transactions, due to pricing by bank counterparties, argues BNY Mellon.

Asian sovereigns might be better off centrally clearing over-the-counter derivatives trades regardless of statutory requirements, because the higher pricing charged on non-cleared, bilateral trades by bank counterparties is likely to outweigh clearing costs.

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