Why margin transparency is always somebody else’s problem
As Esma pushes for clearing clients to receive better information, no-one wants to provide it
Banks have long bemoaned the opaque nature of clearing house margin methodologies. Those complaints intensify whenever stress events cause volatility, with resulting hikes in clearing margin and liquidity squeezes. Lacking a detailed understanding of how margin calls might evolve in those circumstances, end-user clients are left unprepared, and frequently take out their frustrations on clearing
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