Abstract
Since the emergence of trading in OTC derivative products, the infrastruc- ture to support the market has moved towards greater automation and reduced cost. Progress was steady in the 1990s. However, in the early 2000s, CDS enjoyed a significant increase in secondary trading, causing a paperwork crisis. As discussed in section 1.3.5, this was mainly due to the manual approach used for completing assignments and novations. CDS automation had not kept pace with the growth of the market. The FED engaged with the largest banks, encouraging them to make material improvements to their back-office processing. A number of ‘FED letters’ defined a series of quantified targets for banks to reduce outstanding confirmations, and improve processing in most back-office areas. This substantially improved OTC derivatives market processing, leaving us with today’s bilateral market381.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Copyright information
© 2013 Bill Hodgson
About this chapter
Cite this chapter
Hodgson, B. (2013). The Emerging OTC Market Infrastructure From Execution To Settlement. In: OTC Derivatives: Bilateral Trading & Central Clearing. Global Financial Markets Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137293862_8
Download citation
DOI: https://doi.org/10.1057/9781137293862_8
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-45137-1
Online ISBN: 978-1-137-29386-2
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)