Banks are set to profit from new over-the-counter regulations, contrary to earlier predictions that their revenue would suffer, according to a report by Morgan Stanley and consultancy Oliver Wyman. The report indicated that while OTC rules would reduce banks’ margins on contracts by 5% to 10% a year, they would more than make up for it from increased trading volumes as a result of more efficient execution and new entrants. Swap users were also expected to be little affected by the regulations.

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