Euroclear: There is less pressure towards clearing
16 November 2018 Brussels
Image: Shutterstock
There is 鈥渓ess pressure鈥� towards clearing at the moment, according to panellists at this year鈥檚 Euroclear Collateral conference.
Panellists said there were 鈥渢wo main pressure forces鈥� that were particularly prominent in the past, one the regulatory pressure and the other was the withdrawal of financial resources from the sell side.
This affected the buy sides鈥� ability to access the market.
One panellist said that they 鈥渄on鈥檛 see that pressure coming back any time soon鈥�, but said it was too early to write anything off completely.
In terms of trends, panellists agreed that there was a big trend around efficiencies. One panellist said: 鈥淚n a world where margins are becoming more compressed, there is a big trend that we are seeing around product efficiencies. I expect that trend to continue. The new thing is the relationship with the client.鈥�
鈥淭he burden that is going onto our clients is enormous, and this does not get enough attention.鈥�
鈥淲e are equipped to handle these things but clients are tearing their hair out trying to keep up with this,鈥� one panellist said.
The speaker added: 鈥淭he sell side is being constrained for various reasons. Unless a sweep of solutions is made available for clients, I think this is going to be a serious problem.鈥�
Additionally, the panellist drew upon the idea that 鈥榗lients are being de-marketed鈥� and said that as the pressure on financial resources increase, this will continue to be an ongoing issue.
Panellists said there were 鈥渢wo main pressure forces鈥� that were particularly prominent in the past, one the regulatory pressure and the other was the withdrawal of financial resources from the sell side.
This affected the buy sides鈥� ability to access the market.
One panellist said that they 鈥渄on鈥檛 see that pressure coming back any time soon鈥�, but said it was too early to write anything off completely.
In terms of trends, panellists agreed that there was a big trend around efficiencies. One panellist said: 鈥淚n a world where margins are becoming more compressed, there is a big trend that we are seeing around product efficiencies. I expect that trend to continue. The new thing is the relationship with the client.鈥�
鈥淭he burden that is going onto our clients is enormous, and this does not get enough attention.鈥�
鈥淲e are equipped to handle these things but clients are tearing their hair out trying to keep up with this,鈥� one panellist said.
The speaker added: 鈥淭he sell side is being constrained for various reasons. Unless a sweep of solutions is made available for clients, I think this is going to be a serious problem.鈥�
Additionally, the panellist drew upon the idea that 鈥榗lients are being de-marketed鈥� and said that as the pressure on financial resources increase, this will continue to be an ongoing issue.
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