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Ulf Norén, SEB - Nordic Player


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Ulf Norén, SEB - Nordic Player

  1. 1. UlfNorenNordic playerUlf Noren, global head of sub-custody at SEB, talks to AST about theintroduction of CCPs within the Nordic market BEN WILKIE REPORTS of the national exchanges. It went live in Norway in 2010, with the appointment of Oslo Clearing. Once the decision was made, the process went fairly smoothly. But there was some criticism of It’s an interesting question. If you look at the plan - it’s human nature. There was a re- the European CCP environment you can see it’s If you go back several years, the attitude luctance in some parts - the smaller banks and a fragmented world. We have seen some con-to CCPs was negative to neutral. The general broker dealers felt the investment level was too solidation efforts being made but there has been - high, and they’d need to work to a completely no fall in the number of CCPs - in this part of thecient system and if you were a direct member on different understanding of risk. There was also a world a number of CCPs have been added but fear amongst the smaller players that access to none have fallen off. Consolidation is needed securities lending would be restricted and that and will happen, if for no other reason than theThat attitude remained until the Lehman default demand for collateral would be extensive. For complications surrounding interoperability.and the collapse of the Icelandic banks. It’s small players operating in the bilateral environ- ment, the costs of using a CCP complicate mat- And when you look at a CCP, the risk models arewhere the concern started to take hold over therisk of bilateral settlements. ters - there are now fewer broker-dealers as a result of the introduction. the full transparency that will allow us to conclude they are robust enough. We need more transpar- ency and more assimilation in risk models. The - other factor is that because more OTC transac- tions are going on CCPs, there will be higher volumes and more complexity. This means that - cial stability will also increase. ASTthe second was the requirement to avoid the ex- If you look at the larger investment banksponential cost following increasing growth. and broker dealer companies, the response has -The market driver for the CCP came from re- sis but all in all the total volumes have risen andgional banks who brought the issue up with the we still have many competing agents.industry associations in the region. The stockfelt the competition from other exchanges as atrading participants to have a CCP. : There are always improvements to be made and the CCPs are looking at where they can build on what they’ve done. At the moment there is one CCP for three markets and Oslo Clearing in Norway. In addition there’s Euro- The discussions started slightly in ad- CCP with Turquoise. So three major CCPs invance of the crash in 2008, and by 2009 the the market, which could cause some issues, es-CCPs were ready in Denmark, Sweden and pecially in terms of interoperability when and if SEBFinland, with EMCF becoming the market CCP it comes around. 5