Earlier this month, the Federal Reserve re-proposed collateral rules for swaps that don't pass through central clearinghouses. The purpose of the rules is to prevent a financial-system meltdown in the event that one or more large traders becomes unable to meet its derivatives obligations. The latest proposal was tailored to minimize the burden of margin rules on companies that use swaps not to speculate, but to hedge against risks incurred in the course of their non-financial lines of business.

On its surface, the proposal looks good for corporate end users of derivatives, but some remain concerned that companies with sophisticated treasury structures may still get caught in the red tape. To get to the bottom of the proposed regulation and the ambiguity that continues to cause anxiety, Treasury & Risk sat down with Luke Zubrod, director of risk and regulatory advisory with Chatham Financial and a technical advisor to the Coalition for Derivatives End-Users. Luke regularly confers with U.S. Congressional staff and federal regulatory agencies including the Commodity Futures Trading Commission (CFTC) and Federal Reserve regarding derivatives regulatory matters.

T&R:  So, what exactly do the Fed's proposed collateral rules entail?

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.