US margin proposals could lock down $2 trillion in assets
Requirement for banks to post initial margin when trading with each other will result in huge amounts of liquid assets being locked down, according to analysis by one US prudential regulator
An estimated $2 trillion worth of liquid assets will have to be segregated in third-party custodial accounts under US proposals on margining for uncleared over-the-counter derivatives trades, according to one US prudential regulator. The proposals would compound the impact of other rules – on bank liquidity buffers and central clearing – which also require liquid assets to be locked away. In concert, the rules could generate a requirement for $6 trillion or more of similar assets.
The proposals
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