Basel exposure limits raise questions for client clearing

CCP exposures not in scope of new regime, but clearing members are

image of coins being weighed

Banks that clear derivatives as the client of a clearing house member rather than as a member themselves may end up breaching new rules limiting large, single-counterparty exposures if regulators decide member firms are interconnected – a concept introduced when the rules were finalised on April 15. The new limits, released by the Basel Committee on Banking Supervision, do not catch bank exposures to central counterparties (CCPs) - the original fear when the rules were proposed in March