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Clearing thresholds: Difference between revisions
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{{a| | {{a|emir|}}So in this new world where derivatives are finally seen as the [[weapons of financial mass destruction]] that Warren Buffett always said they were, the regulators have announced that, over certain thresholds, parties trading [[over-the-counter]] derivatives must clear them through a [[CCP|central clearing counterparty]], and [[mark-to-market]] exposure arising from those types of derivative which cannot be (or are not) centrally cleared must be fully [[Collateral|collateralised]]. | ||
Short points: a non-financial counterparty must measure its gross exposure to derivatives — against any counterparty — by reference to predefined notionals (see below). If it is over these thresholds in total, it must post margin with respect to all of its exposures, to each counterparty, for that asset class. This does not necessarily affect its obligation to post VM for ''other'' asset classes. | |||
Thus the grand excitement, culminating in the first quarter of 2017, of [[EMIR|variation margin regulation]] (call it [[WGMR]], [[SIMM]], [[UMR]] - whatever the hell you like). The {{EU}} articulation of it was in {{t|EMIR}} - the grandly titled [[European Market Infrastructure Regulation]]. | Thus the grand excitement, culminating in the first quarter of 2017, of [[EMIR|variation margin regulation]] (call it [[WGMR]], [[SIMM]], [[UMR]] - whatever the hell you like). The {{EU}} articulation of it was in {{t|EMIR}} - the grandly titled [[European Market Infrastructure Regulation]]. | ||
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*'''[[FX|Foreign Exchange]]''': EUR3 billion | *'''[[FX|Foreign Exchange]]''': EUR3 billion | ||
*'''[[Commodities]] and others''': EUR3 billion | *'''[[Commodities]] and others''': EUR3 billion | ||
{{sa}} | {{sa}} | ||
*[[clearing thresholds]] | *[[clearing thresholds]] | ||