FIA statement on Basel Committee’s consultation on capital

18 October 2018

Chicago, IL – FIA President and CEO Walt Lukken today made the following statement regarding the Basel Committee on Banking Supervision’s announcement of a consultation on the leverage ratio treatment of client cleared derivatives:

“As FIA has consistently emphasized and demonstrated in our dialogue with policymakers, the leverage ratio has a direct and significant negative impact on the ability of banks to provide clearing services to customers. FIA welcomes the Basel Committee’s decision to publish this consultation and looks forward to responding.

The financial crisis dramatically proved the value of central clearing, and as a result, policymakers made mandatory clearing a central pillar of the G20 recommendations. Unfortunately, the application of certain capital charges works against that mandate by creating economic disincentives for client clearing. 

As the leading trade association for the listed and cleared derivatives industry, FIA has undertaken a multi-year effort to demonstrate to global regulators that initial margin posted  by clients mitigates exposure.”

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