Eurex urges more regulators to endorse VM capital savings

CME, Ice and LCH treat variation margin as settlement; Eurex awaits further guidance

deutsche-borse-headquarters-eschborn
Deutsche Borse-owned Eurex would like further guidance from European supervisory authorities

Eurex Clearing has urged European supervisors to provide clarity on whether variation margin (VM) can be treated as settlement of a cleared swap. Currently, only Credit Suisse and UBS are known to employ the practice as a way of cutting capital requirements on cleared portfolios, with the backing of the Swiss regulator.

Last month, US regulators also gave what banks believe is a green light to begin treating VM as settlement.

“So far, no similar guidance has been provided by European prudentia

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