Fed weighing VM capital cut for cleared swaps

Powell implies support for practice that saved UBS $300m in capital

Federal Reserve
Some industry sources expect a stamp of approval for the margin treatment “in weeks, not months”

The US Federal Reserve is deciding where it stands on a margining practice that can slash capital requirements for cleared swaps, but questions remain over whether use of the approach will generate larger tax bills for US end-users.

Clearing houses and banks have obtained legal and accounting opinions to support the practice – in which variation margin payments are treated as daily settlement of the trade, rather than as collateral – and UBS disclosed a Sfr295 million ($300 million) capital

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: