Spin, Hype and Hyperbole

Talk about spin, and it conjures up (for our UK readers at least) flash government communications directors, or on a more amusing level, Peter Capaldi going full Glaswegian on Whitehall. Indeed, one of the first things you're taught as a reporter is to separate spin from fact. One memorable incident I had during work experience on my local paper was the news editor asking me how I'd go about doing that with a stack of paper press releases (without trying to date my early entry too much). When I stammered a rubbish response, he put them in the wastepaper bin and gave me his phonebook, telling me to call the people quoted directly.

That being said, the press ─ particularly the financial and trade press, it seems ─ is given over to recycling spin and hyperbole to the point of hyping it up. That isn't necessarily down to laziness on the part of reporters, but down to the function of the job itself. A lot of the time we report the conversation, as we don't (or shouldn't, anyway) trade the markets, so we rely on people to tell us what they see as the current trends.

And, of course, sometimes that trend changes, but the phraseology and convention now mandatory when discussing a certain topic area becomes so ingrained that it takes on a life of its own. Try to find an article about swap execution facilities around the made available to trade dates in February that didn't reference a "big bang" moment. One which, incidentally, never came. Likewise, collateral crunch has been a favorite phrase for many years now, not just among the vendors who sell collateral management software but also participants, who found themselves increasingly concerned about the potential issue with each passing conference season.

But this, as Sapient's survey on collateral management suggests, may be changing too. More clarity from the regulators has led most people, the limited sample says, to change their perspective to one that accepts the inevitability of higher cost and demand for collateral, but not necessarily a chronic shortage of it. That seems like a positive move at least.

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More clarity from the regulators has led most people, the limited sample says, to change their perspective to one that accepts the inevitability of higher cost and demand for collateral, but not necessarily a chronic shortage of it.