CCPs confront cleared swap basis threat
In theory, a price difference could emerge for any derivative that is cleared at two or more clearing houses – as recently happened for US dollar swaps at CME and LCH.Clearnet. From Japan to Mexico, other clearers explain how they are trying to avoid it
Who's next? It's the obvious question when a company falls victim to pressures that apply across its sector.
So, when it became more expensive to trade a pay-fixed US dollar interest rate swap that would clear at CME Group – and relatively cheaper to execute the same trade if it was going to LCH.Clearnet's SwapClear – it was not just the two clearing houses and their customers that started fretting.
In theory, a price difference could emerge for any product cleared at two or more central
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