Swaps play hidden role in UK banks’ ring-fencing plans

UK dealers avoid mass transfers of derivatives

This is the first in a two-part series looking at the impact on derivatives books of the UK’s ring-fencing regime. The second article – on funding and valuation issues – will be published later this week.

The complexity of UK banks’ swaps books is playing a behind-the-scenes role in the biggest shake-up of the industry in years – the requirement to house retail and investment banking businesses in separately capitalised legal entities from January 2019.

The three banks with the largest