Clearing & Collateral

These Derivative Cheat Sheets will help make sense of derivatives reform. The attached PDF file includes 3 resources: Page 1 - matrix of the various aspects and differences between Clearing a swap and entering into a bilateral swap (OTC)   (Source: MHDS LLC) Page 2 - Haircuts suggested...

Last month, US Banking Regulators presented a new proposal for the collection, calculation and segregation of margin for bilateral derivatives. The new US proposals are quite different from their original 2011 proposal, in light of the BCBS/IOSCO issuance of their 2013 final policy framework on margin requirements...

The exact impact of increased collateral requirements as the derivatives market shifts from bilateral to cleared contracts is unknown but widely estimated. Moody’s has made a guess of $700 billion to $1.2 trillion, which doesn’t sound too outlandish. Initial Margin Requirements for Swaps Initial margin (expected to be...