Safety of collateral questioned after US woes

US debt concerns have added to fears of a collateral vacuum being created by sweeping reforms to the OTC derivatives market

The global financial services industry has long feared a regulatory-driven collateral shortage, but the issue has gained new impetus following the US debt ceiling crisis.

The saga has thrown into doubt whether US Treasuries - widely regarded as the closest thing to cash - can continue to be trusted as a source of super-safe collateral by banks and asset managers.

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