The swaps clearing mandate under the European Market Infrastructure Regulation is not viable unless regulators relent on Basel Ⅲ leverage ratio requirements that treat client segregated margin as a leveraged asset on the balance sheet, the Futures Industry Association in Europe has warned. Coinciding with its annual European IDX Derivatives Expo held in London last week, the industry group - representing 170 firms involved in listed and centrally cleared derivatives markets - is calling on regulators to recognise the exposure-reducing effect of client segregated margin that is held by clearing brokers to back cleared over-the-counter derivatives trades.
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