Branch2 Intelligence
Collateral Damage: Proprietary traders feel the squeeze under RBI's new rules
Key takeaway
RBI mandates 100% collateral for bank guarantees from July 1, squeezing proprietary trading desks.
- Step 11st-order: RBI mandates 100% collateral for bank guarantees, increasing funding costs for proprietary trading desks.
- Step 22nd-order: Higher costs reduce leverage and trading volumes, squeezing profitability and causing potential job losses.
- Step 33rd-order: Reduced market liquidity and depth may increase volatility and widen bid-ask spreads in Indian markets.
Source: IN:Economic Times
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