Firms have had to re-paper their agreements with counterparties and invest in their operations to handle daily margin calls
Wednesday March 1 sees the introduction of
rules that require all firms holding swaps to start exchanging
with their counterparties variation margin.
National regulators have been moving
individually over recent months and weeks to offer reassurance
they will be lenient in their treatment of non-compliant firms
so the impact on some firms may be deferred.
Yet the feeling on the eve of the deadline
is the industry has once again fallen well short of its mark
and many firms are at this stage far from ready to process
variation margin on a daily basis.
Phil McCabe, head of collateral management
at Bloomberg, told FOW: "I don’t think anyone
feels that most people will be ready. Estimates vary between
10% and 30% of the market being ready but I suspect the real
number is at the low end of that scale."
This article is available to subscribers and registered users
Please log in to continue reading.
Not yet registered? Take a free trial.
If you have already taken a free trial you
have ongoing access to the analysis section of FOW.com including this story.
Log in using your details below to read.
Already have an account? |