Article: Direct Clearing – a perfect fit for the repo market?22 February 2017 | Göran Bolin
Managing client protection in the new regulatory ecosystem can be achieved in a truly cost efficient manner by introducing a direct clearing model. The beauty of a well-designed direct clearing model is that all client driven capital costs for repo transactions are eliminated while clients receive “best-in-class-client-protection”. In other words, Direct Clearing has the potential to benefit the entire financial industry.
This fall it is eight years since Lehman Brothers went into default. Few would have thought that the financial sector would still be wrestling with the massive ripple effects created by this event, the ensuing uncertainty over double or triple dips and the efforts to prevent a new crisis. But the reality is that most market participants today feel the weight of increased regulatory requirements, while simultaneously trying to