Op risk fears as OTC clearing gathers steam

The OTC market's complex new structure will lead to operational glitches, conference participants warn

Despite the industry's best efforts, it will be impossible to avoid operational problems as the over-the-counter derivatives market transitions to central clearing, banks warned yesterday at an industry event in New York.

"I have said this to regulators – I appreciate the buy side are saying it – there are going to be glitches, and no matter what people try, that will happen. It's important to note," said Ray Kahn, global head of OTC derivatives clearing at Barclays.

The first phase of mandatory