POLL: marginal thinking

Author: Amélie Labbé | Published: 17 Oct 2018

Is a rethink of derivatives margin rules needed?

IFLR publishes its monthly poll question on iflr.com and Linkedin group page iflr.com/LinkedIn. Throughout the month, IFLR’s editorial team gather the responses and interview selected respondents. The next poll is online now.

Unregulated derivatives are widely believed to have been a contributing factor to the financial crisis. So-called toxic assets such as exotic types of collateralised debt obligations were traded with little consideration for the stability and integrity of the wider financial system.

The aftermath of the 2007/8 events brought heightened oversight requirements in all areas, including structured finance. The introduction of a widespread clearing obligation for all eligible derivatives through a central counterparty (CCP) is one such requirement, as is the obligation for buyers and sellers to post margin, in the form of cash or liquid securities. Margin ensures that parties to the contract can cover...