Reflecting strong industry pressure and growing concerns about market structure, the banking agencies have joined others with which they share jurisdiction to finalize proposed revisions reducing the capital cost of the 2015 margin rule for non-cleared derivatives. This is accomplished via repeal of current inter-affiliate initial-margin requirements with a new limit intended to constrain insured depository institution (IDI) risk. The rule also expands the class of swaps designated as legacy swaps grandfathered under current standards that retain their grandfather even if amended to replace LIBOR with a new benchmark rate.
The full report is available to retainer clients. To find out how you can sign up for the service, click here.