things not going to plan, page-2

Banks struggle just to keep basic Swaps trading and deal management systems ticking over for their existing OTC activities. Swaps are messy creatures with all manner of payment styles, daycount conventions, principal variations, reference rates and swaproll date conventions. Pricing can easily become quite involved and require quite complex market data. As a result they are quite difficult to accurately catergorize. Knowing that it can take years for a bank to put management systems in place for these instruments I was a bit surprised about the aggressive deadlines that the regulators seemed to be pushing for moving this kind of trading over to a centralised clearning model. Given that the banks don't stand to gain much from the exercise, I wouldn't be at all surprised to see them dragging their feet and hoping that they can lobby the regulations away before they bite. Hence, whilst the centralised clearing thing looks good in principle, in practice it may take years to become profitable even for the primary owners, let alone Razor. It depends greatly on how hard the governments and regulators are prepared to push on it.