Quantile’s Tobias Becker speaks with Euromoney about how the new SA-CCR rules will boost the appeal of clearing FX.

Given the netting benefit of clearing, cleared trades should be materially cheaper than uncleared trades from a capital perspective – assuming the related cost of posting initial margin is managed appropriately.

This contrasts with the current exposure method (CEM), where capital is driven by notional and there are only small differences between a cleared and uncleared trade.

“Capital costs will therefore be driven by net risk and some model inefficiencies, where risk cannot be netted across hedging sets or product types,” explains Tobias Becker, head of business development at Quantile, an interest rate compression and initial margin optimization company.

Read the full article on Euromoney >