Monday, July 1, 2013

OIS Discounting in Asia

Check out the latest edition of Risk Asia. I have been quoted in this excellent article of the current state of OIS discounting at Asian and Australian banks. The key message is that OIS discounting is a fundamental change in the way banks price and view the risk associated with collateralised trades. It is a long and quite complex process and there are PnL opportunities for the early adopters as they can make choices that optimise the the type of collateral they posted. Those banks who wait will become price takers and miss the opportunities OIS discounting presents right now.