CASLA: CCPs feel northern chill
03 June 2016 Toronto
Image: Shutterstock
The limited size of Canada鈥檚 securities lending industry means that only unilateral action by all participants could spearhead the creation of a Canadian central counterparty (CCP), according to panellists at CASLA's Conference on Canadian Securities Lending.
A representative for service providers in the region stated that they 鈥渟tand ready for when the industry wants it [a CCP]鈥�, but a panellist from a large Canadian bank highlighted that the limited number of industry participants means that 鈥渢here really isn鈥檛 any point鈥�.
Another panellist added that the high quality of Canadian banks鈥� credit ratings also means the demand for a CCP doesn鈥檛 exist in the same way it does in the US and Europe.
A buy-side panellist offered some limited hope for CCP in the future, suggesting that 鈥渨e haven鈥檛 seen much innovation in the CCP world, but with the net stable funding ratio on the way in 2018, any potential netting opportunities will be needed鈥�.
The future looks much less gloomy in the US, however, as one custodian panellist argued that the popularity of CCPs in the US is growing, with increasing numbers of market participants 鈥渏oining the CCP bandwagon every year鈥�.
A representative for service providers in the region stated that they 鈥渟tand ready for when the industry wants it [a CCP]鈥�, but a panellist from a large Canadian bank highlighted that the limited number of industry participants means that 鈥渢here really isn鈥檛 any point鈥�.
Another panellist added that the high quality of Canadian banks鈥� credit ratings also means the demand for a CCP doesn鈥檛 exist in the same way it does in the US and Europe.
A buy-side panellist offered some limited hope for CCP in the future, suggesting that 鈥渨e haven鈥檛 seen much innovation in the CCP world, but with the net stable funding ratio on the way in 2018, any potential netting opportunities will be needed鈥�.
The future looks much less gloomy in the US, however, as one custodian panellist argued that the popularity of CCPs in the US is growing, with increasing numbers of market participants 鈥渏oining the CCP bandwagon every year鈥�.
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