FX market weighs viability of spot clearing
Supporters believe it could remove credit risks, but others say it would be unnecessary and add costs
Over-the-counter foreign exchange is one of the few markets not to have fully embraced central clearing. Even though the overwhelming proportion of trades are carried out electronically, market participants have largely felt that the current bilateral model does not need to change.
Only non-deliverable forwards (NDFs) and, to a lesser extent, options have migrated to clearing because of the increased regulatory costs that would be incurred from not doing so. Trades in the larger portions of the
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