The netting of swap payments against variation margin would reduce liquidity requirements in cleared transactions, according to clearing house risk expert Stephen Elliott.
The Bracken column
The Bracken column is named after Brendan Bracken, the founding editor of The Banker in 1926 and chairman of the modern-day Financial Times from 1945 to 1958.
Latest articles from Bracken
Banks all over the world – many of them hit recently by fines for a multitude of reason concerning poor governance – are looking to change the culture within their organisations when it comes to risk. Without the right focus, however, only marginal improvements will be made.
UK plans to use the leverage ratio for countercyclical and systemic capital buffers could throw the future of additional Tier 1 securities into doubt.
The speed and scope of sanctions imposed on Russia since the start of the crisis in Ukraine have forced many companies to enhance their compliance infrastructure and rewrite contracts to restrict potential liabilities from sanctions breaches.
Greater regulatory scrutiny in Europe is compelling banks to better understand their data and consider tough strategic decisions.
Basel-endorsed centralised credit models and too-big-to-fail banks will not provide European economies with what they need, such as an increase in working capital for SMEs. Only deconglomerated banks unbound from Basel III risk management models can do this.
A regulatory over-reaction to allegations of gold market manipulation could deal a fatal blow to the commodities trading desks of investment banks that are already in retreat.
Regulating specific risky activities in the financial sector is more useful than trying to identify systemic non-bank, non-insurance institutions.
The regulation of the global financial sector should be extended to include intensive monitoring of merger and acquisition deals, which are a key source of instability.
The Court of Justice of the EU's rejection of British attempts to appeal against a European short-selling ban could signal a new degree of harmonisation on financial regulation.
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