WGMR proposals raise procyclicality fears

Proposals on the margining of uncleared over-the-counter derivatives trades have been revised to dampen the potential liquid impact

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The derivatives industry looked to have won an important victory when revised proposals on the margining of uncleared over-the-counter derivatives were published in February. Responding to concerns that the first iteration of the rules could have led to a crippling collateral crunch, the Working Group on Margining Requirements (WGMR) – a body led by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions (Iosco) – opted to intro