Risk USA: Futures clearing model not secure, says Prager
Futures clearing model less secure for over-the-counter derivatives than bilateral trading, says BlackRock trading head
The use of a futures-style clearing model for over-the-counter derivatives creates less security for buy-side market participants than the current system, according to Richard Prager, global head of fixed-income trading at BlackRock.
Speaking during a panel discussion at Risk USA in New York on Wednesday, Prager criticised moves towards a futures commission merchant (FCM) model in the OTC derivatives market. Specifically,he decried the pooling of client assets with clearing members, which could
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