To Clear or Not to Clear

Dmitry Pugachevsky, Quantifi, and Alex Tabb, Group Partner and COO, TABB discuss the possibility for regulatory arbitrage between the US and European markets, the impact the new rules will have on the cost of initial margin for exchange-traded derivatives, and how this will drive firms' decisions on which products to trade

The US implementation of the Basel directives, which will be rolled out in the US in January 2014, increases the liquidity coverage ratio and eliminates CVA exemptions, significantly raising the pressure on US banks’ capital. The cost of capital in North America will be greater than the cost in Europe, so one assumes that will lead to regulatory arbitrage in the trading environment.


Innovative thinking


How to Accelerate XVA Performance

As banks look to reduce, mitigate, and optimize XVA and other capital charges, they are making investment in XVA capabilities in an attempt to solve the computational challenge of simulating a full universe of risk factors.


A First View on the New CVA Risk Capital Charge

The impact of the new CVA risk regulation framework on calculation methods and the infrastructure of banks could potentially be the turning point for many of the medium-sized institutes we are seeing in the market.


Quantifi Survey Reveals Challenges in Managing The Cost of Collateral for Clearing

Quantifi today published the results of a short survey conducted as part of its recent webinar on the Cost of Collateral for clearing.

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