EU confusion over cash collateral rules

Dealers want sovereign clients to start posting collateral in derivatives trades, but European Union reporting rules make that tricky. Raising funds to post collateral would have an impact on national debt figures – and the same is also true when receiving cash collateral.

Olofsson Thomas
Thomas Olofsson, Riksgälden

First, the bad news: European countries may be misreporting or ignoring billions of euros of debt associated with their derivatives trades. Now, the good news: it’s not really debt.

According to Eurostat, the standard-setter for national statistics in the European Union, cash collateral posted to debt offices and other sovereign entities against derivatives counterparty exposures has to be reported as a loan and included in each country’s debt statistics.

Some countries, such as Belgium and the

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