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The 2008 demise of Lehman Brothers Holdings caused confusion and uncertainty, but also some constructive brainstorming.
The 2008 demise of Lehman Brothers Holdings caused confusion and uncertainty, but also some constructive brainstorming. One result of the latter, at New Yorks Depository Trust & Clearing Corp., was a first-of-its-kind cash and derivatives clearing concept credited to Murray Pozmanter, 47, managing director of fixed-income clearance and settlement.
Since joining DTCC in January 2007 after heading Nomura Securities Internationals U.S. operations, Pozmanter had been spearheading development of a mortgage-backed-securities central counterparty that, using netting techniques, would reduce settlement risk in trading mortgage pools. Other contemporaneous events the liquidation of Lehmans $500 billion in MBS and government securities, and NYSE Euronexts search for a clearing arm for its Liffe U.S. futures market sparked the idea of a single pot for cash positions and natural derivatives hedges that would take the place of existing cross-margining agreements.
Unable to find appropriate technology elsewhere, DTCC last year formed New York Portfolio Clearing as a 50-50 joint venture with NYSE. On May 1, former futures regulator Walter Lukken became CEO of NYPC, which is expected to open for business in the third quarter. Pozmanter stresses that NYPC will offer a compelling, capital-efficient value proposition and will be open-access, available to support competing futures markets.
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