Access to collateral may prove problematic
Academic study highlights worries of about collateral availability
Market participants could struggle to gain access to the required amount of collateral once the central clearing of most over-the-counter derivative trades is brought into full force, according to an academic study.
The paper, The Economics of Collateral, written by the London School of Economics and Political Science, has found that while there is unlikely to be an actual shortage of collateral in the market, it could become increasingly difficult to access as it gets locked away at central
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