Credit needs transparency to correct mispricing: Marex Spectron

Jun 04, 2013 | 03:43 PM | Andrea Hotter

Tags  Marex Spectron, Simon Van Den Born, credit, EMIR, Andrea Hotter

NEW YORK — A more transparent evaluation of credit is needed to fix its incorrect pricing in the market, according to the global head of metals at Marex Spectron.

Simon Van Den Born said brokers often lump credit into the overall cost of doing business instead of creating a cost-plus model, giving clients a false view of its actual value.

"We believe that credit has continually been mispriced by the marketplace and we prefer to offer a far more transparent pricing of credit rather than trying to build the cost into transactions," he told AMM.

"Pretending that credit is free is incorrect and all it leads to is others finding different ways to extract value from the transaction to pay for it more opaquely," Van Den Born added. ....

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