Hidden floor: dealers tackle negative rate CSA headaches

Banks pushing clients to remove costly interest rate floors in collateral agreements

Firms report digging through dusty old cabinets to find out what their CSAs say about negative rates

This is the second in a series of four articles examining the future of the non-cleared swaps market. The first article is available here, the third is here, and the fourth is here.

A client was recently engaged in talks to cancel two offsetting trades with different dealers – a standard operation for an asset manager looking to clean up its books. But seemingly out of nowhere, one of the banks hit them with a surprise unwind bill for millions of euros.

The two trades had perfectly matching