US banks may lose sovereign clients over margin rules

US banks may lose sovereign clients over Dodd-Frank margin posting rules

US markets

Non-US sovereigns say they could stop executing over-the-counter derivatives with US banks if their counterparties are obliged to collect collateral from them – as envisaged in proposals from US prudential regulators published at the start of April. Sovereigns typically don’t post collateral, and most say they are unwilling to change – whether their counterparties are required to collect it or not. “This doesn’t change my views on swap transactions. Since I&rsquo