US-European rift deepens on leverage ratio

FDIC rebuffs European calls to allow netting of client clearing margin in leverage exposure measure

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Jonathan Hill, the UK's departing European Commissioner for financial services, has added his voice to calls to allow dealers to offset derivatives exposures in the leverage ratio with client clearing collateral. This threatens to deepen a European rift with US authorities on the Basel Committee on Banking Supervision (BCBS), as the Bank of England (BoE) has also reiterated its existing support for relaxing the leverage ratio.

"Unless it's properly designed, the leverage ratio could increase the

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