Derivative Market Competition

Author : Mr.Jens Nystedt
Publisher : International Monetary Fund
ISBN 13 : 145184820X
Total Pages : 49 pages
Book Rating : 4.05/5 ( download)

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Download or read book Derivative Market Competition written by Mr.Jens Nystedt and published by International Monetary Fund. This book was released on 2004-04-01 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent regulatory initiatives in the United States have again raised the issue of a 'level regulatory and supervisory playing field' and the degree of competition globally between over-the-counter (OTC) derivatives and organized derivative exchange (ODE) markets. This paper models some important aspects of how an ODE market interrelates with the OTC markets. It analyzes various ways in which an ODE market can respond to competition from the OTC markets and considers whether ODE markets would actually benefit from a more level playing field. Among other factors, such as different transaction costs, different abilities to mitigate credit risk play a significant role in determining the degree of competition between the two types of markets. This implies that a potentially important service ODE markets can provide OTC market participants is to extend clearing services to them. Such services would allow the OTC markets to focus more on providing less competitive contracts/innovations and instead customize its contracts to specific investors' risk preferences and needs.

Author : Jens Nystedt
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.96/5 ( download)

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Download or read book Derivative Market Competition written by Jens Nystedt and published by . This book was released on 2004 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Jens Nystedt
Publisher :
ISBN 13 :
Total Pages : 48 pages
Book Rating : 4.84/5 ( download)

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Download or read book Derivative Market Competition written by Jens Nystedt and published by . This book was released on 2008 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent regulatory initiatives in the United States have again raised the issue of a quot;level regulatory and supervisory playing fieldquot; and the degree of competition globally between over-the-counter (OTC) derivatives and organized derivative exchange (ODE) markets. This paper models some important aspects of how an ODE market interrelates with the OTC markets. It analyzes various ways in which an ODE market can respond to competition from the OTC markets and considers whether ODE markets would actually benefit from a more level playing field. Among other factors, such as different transaction costs, different abilities to mitigate credit risk play a significant role in determining the degree of competition between the two types of markets. This implies that a potentially important service ODE markets can provide OTC market participants is to extend clearing services to them. Such services would allow the OTC markets to focus more on providing less competitive contracts/innovations and instead customize its contracts to specific investors` risk preferences and needs.

Author : Nystedt T. Jens
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.12/5 ( download)

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Download or read book Derivative Market Competition written by Nystedt T. Jens and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Christina Brinkmann
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.92/5 ( download)

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Download or read book Imperfect Competition in Derivatives Markets written by Christina Brinkmann and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the push towards central clearing in derivatives markets after the global financial crisis, an open question has been how the development has affected competition. This paper models imperfect competition between dealers in derivatives markets. Two risk-neutral dealers offer derivatives to risk-averse clients with a hedging need, and compete in price (fee) and quality (default probability). I find that with such two-dimensional competition, for given default probabilities, an equilibrium in prices exists that is preferred by both dealers. In this equilibrium the dealer with the lower default probability makes larger profits - a feature, that can produce market discipline to keep the own default probability low. If a central counterparty (CCP) is introduced as an innovation that removes the quality dimension of the competition, this market force pushing for higher qualities vanishes.

Author : Hau Harald
Publisher : International Monetary Fund
ISBN 13 : 1498303773
Total Pages : 45 pages
Book Rating : 4.74/5 ( download)

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Download or read book Discriminatory Pricing of Over-the-Counter Derivatives written by Hau Harald and published by International Monetary Fund. This book was released on 2019-05-07 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: New regulatory data reveal extensive price discrimination against non-financial clients in the FX derivatives market. The client at the 90th percentile pays an effective spread of 0.5%, while the bottom quarter incur transaction costs of less than 0.02%. Consistent with models of search frictions in over-the-counter markets, dealers charge higher spreads to less sophisticated clients. However, price discrimination is eliminated when clients trade through multi-dealer request-for-quote platforms. We also document that dealers extract rents from captive clients and market opacity, but only for contracts negotiated bilaterally with unsophisticated clients.

Author : Barbara Alemanni
Publisher :
ISBN 13 :
Total Pages : 27 pages
Book Rating : 4.73/5 ( download)

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Download or read book The Market for Derivatives Products: Co-operation Vs Competition written by Barbara Alemanni and published by . This book was released on 1999 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Robert Lynch McDonald
Publisher : Addison-Wesley
ISBN 13 : 9780201729603
Total Pages : 881 pages
Book Rating : 4.01/5 ( download)

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Download or read book Derivatives Markets written by Robert Lynch McDonald and published by Addison-Wesley. This book was released on 2003 with total page 881 pages. Available in PDF, EPUB and Kindle. Book excerpt: This text for derivatives courses are suitable for advanced undergraduates and both introductory and advanced derivatives courses at the MBA level. The material in derivatives courses is challenging for most students.

Author : Söhnke M. Bartram
Publisher :
ISBN 13 :
Total Pages : 26 pages
Book Rating : 4.22/5 ( download)

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Download or read book Competition Without Fungibility written by Söhnke M. Bartram and published by . This book was released on 2019 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we compare option contracts from a traditional derivatives exchange to bank-issued options, also referred to as covered warrants. While bank-issued option markets and traditional derivatives exchanges exhibit significant structural differences such as the absence of a central counterparty for bank-issued options, they frequently exist side-by-side, and the empirical evidence shows that there is significant overlap in their product offerings although options are not fungible between the two markets. The empirical analysis indicates that bid-ask spreads in either market are lowered by 1-2% due to competition from the other market, providing evidence that the benefits of competing market structures are available in the absence of fungibility.

Author : Sean M. O'Connor
Publisher :
ISBN 13 :
Total Pages : 82 pages
Book Rating : 4.78/5 ( download)

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Download or read book The Development of Financial Derivatives Markets written by Sean M. O'Connor and published by . This book was released on 1993 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: