The House Financial Services Committee considered (i) testimony from federal banking regulators on a broad range of concerns and (ii) several proposed bills imposing additional requirements on financial institutions.
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ISDA CEO Scott O'Malia highlighted potential issues affecting derivatives trading obligations following Brexit in the absence of an equivalence determination.
Federal Reserve Board Vice Chair Randal K. Quarles reviewed the contributions of the Financial Stability Board and raised issues that continue to affect the global financial system.
Concerned with the integrity of customer accounts, ISDA CEO Scott O'Malia criticized the Basel Committee on Banking Supervision for using a leverage ratio that doesn't take client margin protections into account when determining the exposures that banks face as a result of their client clearing businesses. O'Malia posted his opinion titled "Client Margin Protections Should Be Recognized" on the ISDA blog, derivatiViews . Mr. O'Malia discussed what he asserts is a major shortcoming of the Basel Committee on Banking Supervision's "leverage ratio"; i.e. , that margin provided by customers in
The Basel Committee on Banking Supervision and the International Organization of Securities Commissions ("IOSCO") released the final framework for margin requirements for non-centrally cleared derivatives. Under these global standards, all financial firms and systemically important non-financial entities that engage in non-centrally cleared derivatives will have to exchange initial and variation margin commensurate with the counterparty risks arising from such transactions. Below are key principles set out in the framework. Appropriate margining practices should be in place with respect to all