Leaked doc: EU bans initial margin haircuts to resolve CCPs

Council will ban resolution authorities from dipping into clearing members’ initial margin

No haircuts

Leaked documents seen by Risk.net reveal European Union legislators will forbid resolution authorities from being able to raid clearing members’ initial margin accounts if a central counterparty (CCP) runs into financial trouble. Banks have long complained the tool would incentivise a dash for the exit as soon as clearers see signs of stress at a clearing house, to reduce their potential exposure to initial margin haircutting.

“[Initial margin haircutting] would incentivise runs on a CCP,” says

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 info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net 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