Key Points:
From 1 January 2013 an amount equal to 2% of a
bank's derivatives exposure to certain central clearing
counterparties will be added to the total risk-weighted assets of
that bank for regulatory capital purposes.
Capital requirements for bank exposures to central clearing
counterparties (CCPs) are recognised as one of the
final pieces of the incoming Basel III capital framework for banks,
and are part of the broader G20 derivatives reform agenda aimed at
reducing systemic risk in global banking.
As part of the reform process, the Basel Committee on Banking
Supervision (Basel Committee) last week released
interim rules for
the risk-weighting of exposures to CCPs. The rules are designed to
create a financial incentive for banks to clear standardised
over-the-counter (OTC) derivatives through CCPs,
while at the same time ensuring that banks' exposures to CCPs
are adequately capitalised.
