Spectre of mass swap unwinds looms ahead of VM deadline

Dealers warn of market disruption if trades lacking new CSAs are terminated before September 1

Terminating swaps
Some dealers fear they may have to unwind many non-cleared swaps in order to remain compliant with new regulations

A number of banks fear they will be forced to unwind “thousands and thousands” of non-cleared swaps if counterparties do not repaper their collateral documentation by the end of September, leading to market disruption and confusion around pricing. Some dealers may even stop trading with non-compliant counterparties well before September to reduce this risk.

Dealers were required either to sign collateral agreements – known as credit support annexes (CSAs) – with clients for the first time, or t

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