High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our T&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. LMRKTS offers “compression’ services” — whereby it analyses and tears up derivatives deals that are made redundant because two positions are hedged perfectly. While trade compression has existed for more than a decade, its use has been buoyed by changes in capital requirements in the wake of the financial crisis. The introduction of the leverage ratio, which measures bank capital against all of their assets, has made it costly for big banks to hold on to derivatives.

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