Basel haircut floors threaten securities financing desks

Banks fear capital hit unless regulators provide exemption for stock borrowing

Disarming a bomb requires isolating the wire that connects the detonator with the explosive. Cut the right wire, and the bomb is safe. Cut a tripwire, and the bomb explodes. But when all the wires in a device are the same colour, the task of the bomb disposal team becomes much harder.

Such is the predicament facing international regulators and legislators in their efforts to set minimum levels for haircuts that banks apply to collateral they receive from securities financing transactions (SFTs)

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: