U.S. banks would need $644 billion in collateral to offset risks in swaps traded among themselves, according to an analysis of rules re-proposed by regulators.

The Office of the Comptroller of the Currency (OCC) released an estimate yesterday laying out costs for companies including JPMorgan Chase & Co., Bank of America Corp., and Citigroup Inc. to support trades that won't be guaranteed by clearinghouses.

Under revised rules for non-cleared swaps issued by the OCC, Federal Reserve, and Federal Deposit Insurance Corp., banks would have to finance collateral and hold it in custody accounts that may be less profitable than other uses. As a result, OCC economists estimate the requirement will cost the banking industry between US$2.9 billion and US$6.4 billion annually once the rules are fully in place in 2019.

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