the maximum offset? It is not
unfeasible that firms will have
to cut down on what they’re
doing. For example the repo
market is running at about
60-70% of capacity for the last
24 months, so going out and
grabbing that cash quickly isn’t
as easy as it used to be.
JP: Is there then a possibility
then for electronic platforms
to exchange cash collateral
to take off amongst the buy-side?
RM: Peer-to-peer trading,
whether it is repo or fixed
income swaps, there is definitely a future for that. Some
platforms are in development,
but they need to be tried and
tested and liquid before we even
discuss whether or not to use it.
But there is going to be a future
Audience question: From a
can portfolio margining
services be a driver for
clearing decisions, especially
for those that trade a high
volume of OTC derivatives as
well as futures?
RM: Again it depends who you
are. If you are long-only you
are not going to get much benefit from that. But if you are a
relative-value hedge fund, it is
super important. n