Large EU prop traders dump once-loved capital method

Industry lobbied for requirement based on margin haircuts, but it has provided little relief

CMG dumped montage

Once lauded by European proprietary trading firms as a way to avert excessively onerous prudential rules, a method that uses the haircut charged by clearing members for determining regulatory capital requirements has fallen out of favour. More than two-thirds of Dutch and UK non-bank trading firms have snubbed the approach, has learnt.

“The margin method was meant to be a boon for investment firms. They introduced this idea that you could set the regulatory capital at the margin that

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