Wrong-way add-on helped LCH mop up VTB default

Margin supplement bought precious time to formulate wind-down strategy

VTB Moscow head office
VTB's Moscow head office
Photo: Gennady Grachev

A wrong-way risk add-on of roughly 25%, introduced by LCH, helped resolve the default of Russian investment bank VTB’s cleared equity portfolio on March 3, Risk.net can reveal.

VTB was unable to post additional margin or deliver cash and stock to settle trades at LCH EquityClear after its assets in the UK and US were frozen by sanctions on February 25. With Russian securities in free-fall, a potentially damaging default seemed to be on the cards. Instead, LCH closed out VTB’s portfolio in less

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here