How sovereigns learned to live with two-way CSAs

Some say new collateral terms ensured access to markets during last year’s meltdown

In 2018, Nordic Investment Bank found itself in a bit of a pickle. Two years previously, it had reluctantly changed the collateral terms for its derivatives trading – agreeing to post for the first time, rather than just collecting margin from its dealers. The cost of trading under its old, one-way credit support annex (CSA) had been gradually increasing.

“We saw some banks who did not want to trade with us at all as long as we only had one-way CSAs,” says Jens Hellerup, head of funding and