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Extraction Summary
0
People
7
Organizations
2
Locations
1
Events
2
Relationships
2
Quotes
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Summary
This document presents survey results on the challenges and risks associated with new financial clearing rules. The primary challenges identified are the rising cost of collateral (50%) and the complexity of infrastructure and country rules (45%). The biggest perceived risks in the clearing mandate are collateral concentration issues (33%) and cybersecurity (27%).
Organizations (7)
| Name | Type | Context |
|---|---|---|
| BofA Merrill Lynch | ||
| DTCC | ||
| Euroclear | ||
| BNY Mellon | ||
| CME | ||
| SEC | ||
| Bank of America Merrill Lynch |
Timeline (1 events)
2016 Future of Financials Conference
Key Quotes (2)
"Panel participants believe that the election/shift in regulatory outlook might lead to a slowdown of products being added to the clearing mandate, with FX being the biggest unknown."Source
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Quote #1
"We asked investors what the biggest potential risks are in the clearing mandate and CCPs, and 33% of voting investors thought collateral concentration issues with cybersecurity (27%) coming in 2nd."Source
HOUSE_OVERSIGHT_014362.jpg
Quote #2
Full Extracted Text
Complete text extracted from the document (1,547 characters)
Chart 70: What is the primary challenge related to the new clearing rules?
60%
50%
50%
45%
40%
30%
20%
10%
2%
2%
0%
The rising cost,
particularly in the
amount of collateral
required
The complexity around
infrastructure and
different country rules
The lack of dealers
offering the capabilities
given their challenges
None
Source: BofA Merrill Lynch Global Research
60%
50%
50%
45%
40%
30%
20%
10%
2%
2%
0%
The rising cost,
particularly in the
amount of collateral
required
The complexity around
infrastructure and
different country rules
The lack of dealers
offering the capabilities
given their challenges
None
Source: BofA Merrill Lynch Global Research
•
Panel participants believe that the election/shift in regulatory outlook might lead to
a slowdown of products being added to the clearing mandate, with FX being the
biggest unknown.
Panel participants believe that the election/shift in regulatory outlook might lead to
a slowdown of products being added to the clearing mandate, with FX being the
biggest unknown.
•
Going forward, firms are tackling U.S. vs Europe collateral harmonization/transfer
(DTCC and Euroclear are working on a collateral transfer initiative that is expected
to launch in 1Q17), collateral management through firms including BNY Mellon, and
Cleared repo could also be on the horizon (CME has filed an application with the
SEC but no timeline given).
Going forward, firms are tackling U.S. vs Europe collateral harmonization/transfer
(DTCC and Euroclear are working on a collateral transfer initiative that is expected
to launch in 1Q17), collateral management through firms including BNY Mellon, and
Cleared repo could also be on the horizon (CME has filed an application with the
SEC but no timeline given).
•
We asked investors what the biggest potential risks are in the clearing mandate and
CCPs, and 33% of voting investors thought collateral concentration issues with
cybersecurity (27%) coming in 2nd.
We asked investors what the biggest potential risks are in the clearing mandate and
CCPs, and 33% of voting investors thought collateral concentration issues with
cybersecurity (27%) coming in 2nd.
Chart 71: What is the biggest potential risk in the clearing mandate and CCPs?
35%
33%
30%
27%
25%
20%
17%
17%
15%
10%
7%
5%
0%
Much more
collateral will be
needed in stress
times
There will be
collateral
concentration
issues
CCP risk models
fail
Dealer/FCMs fail
Cybersecurity
Source: BofA Merrill Lynch Global Research
35%
33%
30%
27%
25%
20%
17%
17%
15%
10%
7%
5%
0%
Much more
collateral will be
needed in stress
times
There will be
collateral
concentration
issues
CCP risk models
fail
Dealer/FCMs fail
Cybersecurity
Source: BofA Merrill Lynch Global Research
48
2016 Future of Financials Conference | 17 November 2016
Bank of America
Merrill Lynch
HOUSE_OVERSIGHT_014362
2016 Future of Financials Conference | 17 November 2016
Bank of America
Merrill Lynch
HOUSE_OVERSIGHT_014362
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