5,000 trades: Basel III's magic number squeezes swaps books

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Five years ago, traders had very different priorities, says a New York-based derivatives lawyer who used to work at one of the big US banks – they only cared about the net risk of their books, and were oblivious to the line items that silently piled up as they traded. 

As an illustration, he tells a story about a call he received from one interest rate swap trader, saying his desk had breached its credit limit with another dealer. “That’s crazy. How did you do that?” the lawyer responded. It tur