Sovereign two-way CSAs would probably resemble one-way posting, says Dutch DMO
High thresholds would reduce credit and funding benefits of two-way CSAs for banks, DSTA head says
Reciprocal collateral agreements between sovereign swap users and dealer counterparts would probably not be radically different to one-way credit support annex (CSA) agreements, says Erik Wilders, head of the Dutch State Treasury Agency (DSTA) in The Hague.
"In theory, if we were to sign two-way CSAs with swap dealers, the agreements would have to provide enough warranties to ensure we never get exposure to the credit risk of a bank. In other words, the CSAs would have very high posting
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