Derivatives regulations 2013

[pluMmet]

U.S. banks have > 80 Trillion exposure to derivatives. That have little to back up their ownership of them (A few hundred billion.)

New rules going into effect in 2013 require all derivatives to have a much larger cushion to hold/keep them.

They can't afford it so how will they Handel it?

http://www.risk.net/risk-magazine/advertisement/2227797/sponsored-video-regulatory-impact-on-collateral

[video in link]

New regulation will require more derivatives participants to post more collateral than ever before. In this video interview, David Little of Calypso discusses some of the implications

A variety of new regulatory measures will soon be implemented that will have a dramatic impact on the use of collateral. Under an agreement reached by Group of 20 nations in September 2009, all standardised derivatives will soon need to be cleared through central counterparties (CCPs) - requiring derivatives users to post initial and variation margin to clearing houses. At the same time, regulators are working to finalise new margin requirements for uncleared trades.

Meanwhile, Basel III will require banks to hold a buffer of high-quality liquid assets - for the most part, comprising cash and government bonds. Taken together, it places a heavy demand on these forms of collateral - and some participants have questioned whether there are enough eligible assets to satisfy this need.