Unclear incentives: do capital and margin rules support CCPs?

Five months after a regulatory study concluded capital and margin rules support mandatory swaps clearing, those findings are under fire. The analysis was plagued with data problems and ignored the impact of the leverage ratio – but that was not mentioned in a summary report to Group of 20 finance officials

clearing-word-cloud-app
All clear? Banks accuse report of significant blind spots

The mandatory clearing of over-the-counter derivatives rests on a promise of economic legitimacy that has been repeated time and again by regulators since leaders of the Group of 20 (G20) nations agreed the policy in 2009. Simply put, it will be cheaper to clear an OTC trade than to execute it bilaterally.

So, is it? In April 2013, regulators set out to test the proposition, convening a group of 22 economists from 13 central banks and regulators – the OTC Derivatives Assessment Team (DAT) –

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here