Ring-fencing law swells Lloyds’ swap book

UK ring-fencing rules forced Lloyds to recognise intra-group swaps as arm’s length trades between third parties, resulting in a huge increase in the size of its derivatives portfolio and associated capital costs.

Total notional derivatives at the UK lender ballooned £2.5 trillion ($3.3 trillion), or 69%, to £6.1 trillion in 2018. Cleared swap notionals jumped to £5 trillion from £3 trillion in 2017, and bilateral notionals to £1.1 trillion from £618 billion. 

It is understood the leap in

To continue reading...

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: