Central Counterparty Capital Rules Could Discourage Client Clearing, Critics Claim
By Matt Cameron
Published November 9 2011 Risk
Revised Basel rules provide little capital incentive for clearing members to clear trades on behalf of clients, say bankers. Exposures to clients would also have to be treated as a bilateral trade. Banks will have no incentive to clear trades on behalf of their clients under revised proposals published by the Basel Committee on Banking Supervision last week. The move puts the rules at odds with a stated regulatory objective to encourage clearing via capital inducements, critics claim.
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