Addressing initial margin challenges in the new swaps world

Abstract

As many firms are preparing for the impacts of Dodd–Frank, many are facing the challenges of funding initial margin. CME Group has worked closely with the market to create solutions to deal with these challenges in the wake of regulatory changes. To help alleviate some of the pain that firms will face with the additional costs, CME has broadened the acceptable collateral to include high-quality corporate bonds, portfolio margining of cleared interest rate swaps with futures, and launched new and innovative products including the deliverable swap futures. In a capital-constrained world, CME Group is committed to providing capital-efficient solutions to help firms with the collateral impact of clearing swaps.