The over-the-counter derivatives market is set to shrink by tens of trillions of dollars over the coming months as banks scythe down gross notional positions to meet leverage ratio targets under Basel Ⅲ. Post-trade specialist TriOptima has already helped banks tear-up US$59trn of interest rate swaps within LCH.Clearnet since last December, adding to the billions of assets banks have shed through bilateral efforts over the past year. And this could be just the tip of the iceberg. There is US$434trn of gross notional sitting within LCH's walls - more than 60% of the total derivatives market. Banks' eagerness to slash back derivatives books coupled with TriOptima's plans to include new products in compression cycles could see notional amounts begin to fall steeply, potentially halving the current amount outstanding within LCH.
展开▼
