US banks may lose sovereign clients over margin rules
Foreign debt offices say they will consider not trading with US banks if they are forced to post collateral
Non-US sovereigns say they could stop executing over-the-counter derivatives with US banks if their counterparties are obliged to collect collateral from them – as envisaged in proposals from US prudential regulators published at the start of April. Sovereigns typically don’t post collateral, and most say they are unwilling to change – whether their counterparties are required to collect it or not.
“This doesn’t change my views on swap transactions. Since I’m still not willing to post collateral
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