CME Clearing Europe to Accept Gold as Collateral

CME Clearing Europe has announced that it has extended the range of eligible collateral types to include gold bullion in connection with the clearing of over-the-counter (OTC) derivatives.

[Lofchie Comment: One of the criticisms made of swaps regulation under Dodd-Frank is that it simultaneously (i) increases the requirements that swaps parties post collateral, and (ii) at least in the United States, substantially decreases what firms will be able to post as collateral, potentially raising materially the costs of acceptable collateral. Accordingly, it will be interesting to see if there are further pushes, either on the legal or business front, to expand what will constitute acceptable collateral for derivatives transactions.]