Risk.net

OTC settlement systems improve

Systems for clearing and settling OTC derivatives trades have strengthened over the past few years, but further progress is needed to reduce risk, according to a recent report. The findings recommend greater use of automated systems to reduce confirmation backlogs in all OTC derivatives classes, following their success with credit derivatives. For remaining backlogs, the report suggests dealers mitigate risk by moving towards daily portfolio reconciliations with active counterparties. Dealer

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