More European debt offices consider posting collateral

02/27/2012 | Risk.net (subscription required)

Sweden, Ireland, Hungary and Portugal started posting collateral to derivatives counterparties after signing two-way credit-support annexes. Danish and Latvian debt-management offices are considering following suit. "We are currently analyzing bilateral collateralization because we are well aware of the capital implications and liquidity obligations that our banking counterparts are currently facing with regards to one-way CSAs, and how these issues are likely to affect the cost of transacting swaps," said Ove Sten Jensen, head of government-debt management at Denmark's central bank.

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