Swap futures margins may be underestimating risk exposures
A difference in margin approach between swaps and futures may mean the latter are not assessed on their level of riskiness
A senior market participant has warned against the 'futurisation' of swaps in the over-the-counter derivative markets, saying the lower margin requirements for these futures versus traditional swaps may not accurately represent their risk.
The global regulatory drive towards the mandatory clearing of OTC derivatives has led exchanges such as CME Group, IntercontinentalExchange and Singapore Exchange (SGX) to introduce different forms of swaps that enable users to clear the instrument as a
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