Immobile nature of collateral making clearing harder

By Daniel O'Leary
23 Jun 2014

Collateral is being locked up in bottlenecks caused by changes to regulations, central bank policy and risk management techniques, potentially making the take-up of central clearing of over-the-counter derivatives harder.

The London School of Economics and Political Science released a report, entitled The Economics of Collateral, which argues the bottlenecks are causing the scarcity of collateral, not just simply reductions in collateral volumes. The bottlenecks are being caused by inherent weaknesses in the global financial system, central bank ...

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