FDIC margin rule hands pricing advantage to EU banks in Asia

European and US regulators differ in their treatment of inter-affiliate trades

Keith Noyes, Isda

A requirement for dealers to collect initial margin for inter-affiliate trades in revised margin rules for uncleared swaps, published by the Federal Deposit Insurance Corporation (FDIC) in October, could potentially hand a pricing advantage to European banks active in Asian markets, according to the International Swaps and Derivatives Association (Isda).

The FDIC rules, effective from April 1, 2016, require firms to collect, but not post, initial margin from their affiliate counterparties.


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