Regulators urged to back non-cash variation margin
Market participants warn FSB on cash collateral demand as banks curb collateral upgrade trades
Market participants want regulators to support the use of non-cash instruments for variation margin (VM) calls, in response to stress events in recent years that have led to sharp spikes in margin requirements. Non-cash collateral is already accepted by dealers and some clearing houses as initial margin, but its uptake for variation margin is rarer.
In some ways, this looks like applying banking standards to market participants where that is not possible or appropriateIn-house counsel at an
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