
VM change helps Barclays cut derivatives by $113bn
Three factors slashed size of book by 25%, including move to treat margin as settlement

Barclays has become the latest bank to confirm it is treating variation margin as the settlement of a cleared derivative, rather than as collateral – a move that contributed to an £87 billion ($113 billion) drop in the size of the bank’s derivatives assets, according to its second-quarter results.
Major clearing houses have obtained legal opinions to support what’s known as settled-to-market (STM) treatment of cleared swaps, but US banks have been wary of adopting the practice without
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