US dealers breathe easier as global uncleared margin rules take shape

The extraterritorial scope of US margin rules would have left US banks’ overseas swaps business in tatters, but an international working group looks set to deliver a reprieve by endorsing similar rules. In doing so, it could also create a liquid asset black hole. Matt Cameron reports

Bank regulation does not throw up many stories of death-defying escape. There are no swashbuckling rescues, no dealers-in-distress shackled to train tracks, no situations in which the hero escapes with one mighty leap. But attempts to thrash out global margin standards for uncleared over-the-counter derivatives may be an exception to that rule – a working group was quietly convened last September