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Lch doubles margin again

  • 17-11-2010 08:54AM
    #1
    ashleey
    Registered Users, Registered Users 2 Posts: 2,005 ✭✭✭


    Just hearing that lch euroclear have doubled the margin on Irish govt bonds again. Given what that did last week is that another pressure point for the banks here?


Comments

  • #2
    maxwell smart
    Registered Users, Registered Users 2 Posts: 1,940 ✭✭✭maxwell smart


    Looks like they are hedging their own position, if the bond price goes up then its ok for them, but if there was a bailout and the coupon fell then they would have a potentially serious shortfall of coverage.


  • #3
    ashleey
    Registered Users, Registered Users 2 Posts: 2,005 ✭✭✭ashleey


    Given that it seems that yields haven't moved much then maybe most positions that could be were liquidated last week?


  • #4
    maxwell smart
    Registered Users, Registered Users 2 Posts: 1,940 ✭✭✭maxwell smart


    Could well be, but I think there is a game of very high stakes poker going on at the moment. I'd say most bond holders are waiting for someone else to move. At the moment with this much uncertainty in the Market on if a bailout will happen, it's Texas Hold'em!


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