Member revolt forces SwapClear to revamp margin model


LCH.Clearnet is overhauling the margin model used by SwapClear, its interest rate swap clearing service, after members protested it was not generating big enough collateral calls – resulting in the risk being covered by member contributions to the default fund instead. That is a problem because losses that eat through a defaulting member's initial margin and default fund contribution are shared among the other contributors to the fund – less initial margin means more mutualised ri