MEP: Basel too slow to deal with clearing capital clash

Isda AGM: Swinburne criticises Basel’s lethargy on clash between leverage and clearing rules

Long time coming: the industry has been calling for a change in the leverage ratio

An influential member of the European parliament (MEP) has hit out at the Basel Committee on Banking Supervision for being too slow to adjust its capital rules to deal with clashing clearing and capital requirements.

The G20 nations have required standardised derivatives contracts to be centrally cleared, but the leverage ratio counts cash initial margin posted by clients to clearing members as an exposure needing to be capitalised. The resultant capital costs have left some dealers reluctant