WGMR rules create funding complexity for dealers

How long will a client hold a 10-year swap? It could be 10 years – or it could be 10 days – and the answer has big implications for dealer funding requirements. Some are now in the early stages of looking at the expected lifespan of client positions. By Matt Cameron

At an industry conference last month, a panel of experts hummed and hawed over whether there was enough liquid collateral in circulation to allow firms to meet new initial margin posting obligations for uncleared over-the-counter derivatives, following the finalisation of rules on the subject in September. It’s a tricky one to pin down, with estimates on collateral requirements ranging from the hundreds of millions to trillions of dollars. But, important as that issue is, it is perhaps the