Standard CSA: the dollar dominance dispute
Disputes over the valuation of collateralised derivatives trades have pushed the industry to develop a new standard credit support annex. A solution has been proposed – but some Asian and Australian banks have raised concerns about the dominant role given to the US dollar in the new framework. Are their concerns justified? By Nick Sawyer and Viren Vaghela
No-one thought the push to a new standard credit support annex (CSA) would be effortless. But with an implementation plan approved by the International Swaps and Derivatives Association board just a few months ago, and with some firms eyeing a second-quarter 2012 roll-out, it may have seemed most of the heavy lifting had been done. That view now seems a little hasty. Some banks – particularly those in Asia-Pacific – are apprehensive about the perceived dominance of the US dollar in the new
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