After Treasury &Risk ran a recent article on the Fed's proposed margin rules fornon-cleared derivatives transactions, we received a reader inquiryasking for further clarification. Joseph Neu of The NeuGroup, anetwork that promotes knowledge sharing among corporate treasurers,asked about the combined effects of the current Fed proposal andregulatory capital charges on margin-exempt swaps.

If capital requirements drive up the price of derivativestrades, will companies consider posting margin to reduce costs,even though they fought long and hard to avoid being included inthe collateral rules?

To answer, we sat back down with Luke Zubrod, director of riskand regulatory advisory with Chatham Financial and a technicaladvisor to the Coalition for Derivatives End-Users. Luke regularlyconfers with U.S. Congressional staff and federal regulatoryagencies including the Commodity Futures Trading Commission (CFTC)and Federal Reserve regarding derivatives regulatory matters, andfrequently helps T&R suss out the details ofcomplex derivatives regulations.