OTC Derivatives Clearing Summit Europe: Corporates could be source of eligible assets for clearing

Cash-rich corporates could replace capital-constrained dealers as providers of collateral transformation services, according to one asset manager

Cash-rich corporates, rather than banks, could become the main providers of liquid assets to pension funds and other derivatives users that lack eligible collateral for derivatives clearing, according to one asset manager.

Banks are typically seen as the natural providers of this new service – known as collateral transformation – but with the industry under pressure from Basel III's new capital and liquidity rules, they may not be willing to take on the risk involved, said Vanaja Indra, senior