As herds of over-the-counter derivatives inch their way – more or less reluctantly, but nonetheless inexorably – towards central counterparties, it is as good a time as any to assess what impact such a migration will have on the status quo.

Will a largely cleared OTC marketplace shift the balance of power, irretrievably eroding the advantage of sellside firms while augmenting that of the buyside? Will clearing provide a kick-start for electronic trading where previously it has failed to gain traction? And will it automatically then follow that those barriers erected to separate dealer and non-dealer markets will be dismantled and that spreads will shrink to the levels prevalent in the cash equity market and beyond?