Ice Clear Europe collateral spreads a ‘nightmare’, say banks

Risk.net spread analysis shows Ice pays little more than half the rate of other CCPs on cash margin

For years, banks and their clients not only had to post millions in initial margin on cleared derivatives, but they also had to pay the clearing house for the privilege of holding that margin because of negative interest rates. At least rising interest rates since 2022 hold out the promise that clearing houses would now pay members interest on the cash collateral instead. But for one clearing house in Europe, even that consolation is being snatched away.

Banks are growing increasingly