New standard CSA could be hurt by WGMR rules

030413csa

The first trades under the new standard credit support annex (CSA) were executed at the end of last year – the culmination of a two-year-plus project to revamp the document after the existing CSA became a source of valuation disputes. But a single sentence in the appendix of new proposals for the margining of uncleared derivatives could hold back adoption of the new agreement, some dealers acknowledge. The issue centres on a mechanism designed to mitigate cross-currency settlement risk,