Lawyers blast Basel on funding of STM swaps

'Daft' guidance would see settled-to-market derivatives caught by NSFR and LCR liquidity ratios

The Bank for International Settlements, Basel
Photo: Ulrich Roth

Lawyers are criticising the inconsistency of a move by the Basel Committee that would see centrally cleared settled-to-market (STM) derivatives caught by Basel liquidity guidelines and counted towards exposures requiring stable funding under net stable funding ratio (NSFR) rules.

“I do not know where this came from or what the thinking is behind it, but it seems to be out of line with current thinking on this issue, in Europe at least. Consequently, I rather doubt that it will be adopted as a

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