Hidden floor: dealers tackle negative rate CSA headaches

Banks pushing clients to remove costly interest rate floors in collateral agreements

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Firms report digging through dusty old cabinets to find out what their CSAs say about negative rates

This is the second in a series of four articles examining the future of the non-cleared swaps market. The first article is available here, the third is here, and the fourth is here.

A client was recently engaged in talks to cancel two offsetting trades with different dealers – a standard operation for an asset manager looking to clean up its books. But seemingly out of nowhere, one of the banks hit them with a surprise unwind bill for millions of euros.

The two trades had perfectly matching coup

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