Banks are bracing for a rocky start to the swaps market's new margining regime on September 1, with many still ploughing through the stack of legal documents that will allow them to trade.
Those closest to the work have been warning their traders to expect "liquidity gaps", as some banks may initially be left with a reduced number of counterparties; one London-based back-office source predicts "near paralysis" in the week following the deadline, as dealers tiptoe into the new market.
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