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March 9, 2012

US banks could lose competitive edge in Europe, says EIB – Risk.net

US banks could lose competitive edge in Europe, says EIB – Risk.net.

Subscription required, but good article.

The EIB along with the ECB, and development banks like the EBRD, will be adversely affected by clearing,

The EIB explains that their portfolio of IRS is heavily directional, they lend fixed and swap into floating, which mean a high margin requirement for IM at a CCP.

Their position is, that if they can avoid clearing under Dodd Frank and trade with a non-DFA counterparty they will. EMIR excludes these sorts of firms from the clearing rules – a concrete example of regulatory arbitrage you might say.


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