US regulators told to expect VM status change

Fed, FDIC and OCC told daily settlement of swaps will cut required capital

Federal Reserve
'Impending' change could hit capital for swaps, Fed told

US regulators have been told to expect big cuts in the exposure numbers banks report for their cleared over-the-counter derivatives – the result of a radical change to margining practices that central counterparties (CCPs) and their members have been pursuing.

The change – if approved by CCP regulators – would see the payment of variation margin treated as settlement of a cleared swap, rather than as collateral. That would cut exposure for a cleared swap by as much as two-thirds, according to a

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