Banks, CCPs protest Esma’s ‘prescriptive’ procyclicality rules

Dealers welcome model transparency push, but call for greater say on methods to combat spikes

Esma headquarters, Paris
Esma headquarters, Paris
Photo: Esma

Banks and clearing houses alike are railing against “prescriptive” new rules proposed by European regulators to curb spikes in initial margin (IM) at central counterparties (CCPs) during times of severe market stress.

Almost two years after the rapid spread of the coronavirus sent shockwaves through markets, and saw margins spike dramatically for many assets, the European Securities and Markets Authority (Esma) proposed amendments to European Union rules on January 27 aimed at preventing a

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