A global industry group has changed the way derivatives traders should calculate their margin requirements, following concerns by the Bank of England that some market participants risk posting insufficient collateral.
The International Swaps and Derivatives Association said it had worked with regulators and market participants around the world to review its Standard Initial Margin Model and decided to lower the threshold at which a counterparty needs to post more margin. The BOE’s Prudential Regulation Authority, or PRA, said last year that ISDA’s metholodogy didn’t appear to accurately reflect the risk some funds face when trading.
Learn more about Bloomberg Law or Log In to keep reading:
See Breaking News in Context
Bloomberg Law provides trusted coverage of current events enhanced with legal analysis.
Already a subscriber?
Log in to keep reading or access research tools and resources.