EBA’s repack answers leave dealers guessing
Spire dealers are split – some see worst-case scenario, others assume gentler treatment
Dealers have been left confused after the European Banking Authority (EBA) last month published two long-awaited answers to the question of how banks must capitalise swaps they write against repack vehicles.
At the heart of the confusion is whether a dealer can treat the bonds held inside a repack special-purpose vehicle (SPV) as eligible collateral, and so use them to reduce the counterparty
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