Relief for dealers as Basel reins in capital for cleared trades

Green light at a traffic light

Clearing over-the-counter derivatives trades looks likely to be less painful than dealers had feared, after the Basel Committee on Banking Supervision finalised controversial rules on capital requirements for exposures to central counterparties (CCPs).

The new rules, published on July 25, address a number of long-running concerns, dealers say. There is a simpler way to work out how much capital members of a CCP need to hold against their contributions to its default fund, as well as

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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