Diverse netting approaches create OTC headache
Gap in the net
Diversity in Asian capital markets has prompted a slew of issues that are not present for their European or North American peers – the lack of a centre for derivatives trading such as the role London plays in the European Union’s market means there will be a number of clearing houses to emerge. Separate institutions in Seoul, Sydney or Singapore – to name just three examples – will lead to replication of business lines and a fragmentation of collateral.
But the problems don’t stop there and one
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