15.03.2013
BCBS / IOSCO: OTC Derivatives

GDV’s comments on the consultation of the international committees of Banking – and Securities Supervisory Authorities

The German Insurance Association (GDV) participated in the second consultation of the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) on the margin requirements for non-centrally cleared derivatives.

The following aspects have been highlighted:

  • Variation margining seems the effective and sufficient way to mitigate risks of non-centrally cleared derivative transactions. Initial margining in the case of bilateral OTC-derivatives may on the contrary lead to new, additional risks.
  • Physically-settled FX forwards and swaps transactions should be exempted from the initial margin requirement. Different maturities should not lead to different treatments.
  • German insurers are not in favor of the possibility to re-hypothecate initial margins.
  • The proposed phase-in arrangements seem appropriate to German insurers.
  • We would estimate the figures of the model-based bilateral margin requirements average higher than summarized in the executive summary.

The GDV’s complete comments is available in the download section.

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the consultation of the international committees of Banking - and Securities Supervisory Authoritie

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