Rules will cause collateral demand to surge, experts say

04/11/2012 | Risk.net (subscription required)

Market participants are voicing concern about increased collateral that will be needed because of upcoming regulations. Global standards on collateral for uncleared trades, central clearing for standardized derivatives and Basel III's liquidity-coverage ratio could result in $7 trillion in collateral demand. "If you take the liquid assets required by Basel III's LCR, central counterparties and potentially strict initial margin requirements on uncleared trades, there is no doubt these rules taken together will cause a collateral shock," said Peter Sime, ISDA's head of risk and research.

View Full Article in:

Risk.net (subscription required)

Published in Brief: