

Soft inflation print triggers initial margin breaches at FICC
Clearing units for MBSs and government securities hit by backtesting deficiencies as coverage levels dip
A lower-than-expected inflation reading in November triggered two large initial margin breaches at the government securities division (GSD) and the mortgage-backed securities division (MBSD) of the Fixed Income Clearing Corporation (FICC), with both clearing services reporting coverage levels below their 99% target.
The GSD reported a $417 million deficiency on November 7, calculated as the size of uncovered exposures following the result of backtesting of initial margin coverage. The clearing
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