BBA, ISDA, the Institute of International Finance, and the Global Financial Markets Association have responded to the Basel consultation on capitalisation of bank exposures to central counterparties (CCPs). The comments focus on:

  • the importance of the incentive structure that arises from capital rules for exposures to CCPs and how there is a risk margin levels may become too high;
  • the need for an integrated analysis of the risks that clearing houses and their participants have to manage, and the need for Basel to engage with other associations, particularly IOSCO, to ensure a response is properly coordinated; and
  • building in recognition that the market develops dynamically and in particular the need to recognise current initiatives such as the Dodd-Frank Act and EMIR.

(Source: Basel Committee on Banking Supervision Consultative Document: capitalisation of bank exposures to central counterparties)