Basel closes in on IM offset for leverage ratio

US seen as obstacle to consensus; committee expected to allow netting of margin against PFE only

The Bank for International Settlements, Basel
Ulrich Roth

Bank regulation standard-setters may be on the verge of settling a long-running dispute over the leverage ratio, with three sources expecting a final standard on the ratio’s treatment of client clearing margin following a meeting of the Basel Committee on Banking Supervision on June 19 and 20.

The industry claims the current version of the ratio inflates capital requirements for the clearing business by failing to recognise that margin reduces exposure.

“[We] have heard that a decision is

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