Basel Committee Sets Capital Levels For Clearinghouse Deals

Law360, New York (July 25, 2012, 6:44 PM EDT) -- A panel of global regulators on Wednesday unveiled interim rules that outline how much capital banks should hold in order to cover their exposure to financial clearinghouses that serve as middlemen in derivatives contracts between financial institutions.

The rules issued by the Basel Committee on Banking Supervision give preferential treatment to banks that deal with clearinghouses — also known as central counterparties — which meet tougher supervisory standards. Specifically, the rules require that banks hold additional capital equivalent to 2 percent of their trading exposure to...
To view the full article, register now.