Derivatives Workflow in 2020: How to Balance Capital Efficiency and Uncertainty

An excellent article from Philip Simons and Ricky Maloney at #eurex that discusses “How to balance Capital and Efficiency and Uncertainty” in the context of Derivatives Workflow. There is very little to disagree with in their analysis, but to gain all of these efficiencies much is predicated on the migration of OTC execution onto electronic mediums. #esma reported in their 2019 annual statistical report that 83% of OTC volume is traded off venue. Which, whilst not wishing to read too much into the data, would indicate that a good deal of OTC volume is still executed on chats or via the telephone. In order to employ many of the practices Phil and Ricky refer to will require the electronification of OTC execution from inception of the trade which will enable the importing of services that optimise the workflow and generate efficiencies at a pre trade level. Moreover, to fully maximise netting and correlation benefits you will need as broad a universe of OTC as possible. Now is the time to move into the 21st century, maximise the efficiencies outlined in this article, reduce operational and regulatory risk and increase productivity. #OTCX #derivatives #collateral #otc
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Derivatives Workflow in 2020: How to Balance Capital Efficiency and Uncertainty
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