VM push fails to deliver cleaner CSAs

Dealers have softened stance on collateral terms as March 1 deadline approaches

Photo of mixed currencies
Calling all collateral: banks are accepting various types of government bonds as collateral

With the March 1 derivatives variation margin deadline looming, banks appear to have largely given up on hopes the project could be used to simplify the market’s bespoke collateral agreements.

To comply with the rules, market participants need to amend or replace existing credit support annexes (CSAs) that often allow the posting of cash and bonds in a variety of currencies – optionality that affects the value of each trade, and has caused headaches for dealers and their customers in recent

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