Risk: Variation Margin rules not simplifying buy-side collateral choices

VM push fails to deliver cleaner CSAs

With the March 1 derivatives variation margin deadline looming, banks appear to have largely given up on hopes the project could be used to simplify the market’s bespoke collateral agreements. To comply with the rules, market participants need to amend or replace existing credit support annexes (CSAs) that often allow the posting of cash and bonds in a variety of currencies.

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