Fed should weigh easing margin standards for banks' internal swap deals, Quarles says

21 November 2018 7:12am
The US Federal Reserve should consider relaxing margin requirements for US banks’ overseas affiliates that participate in uncleared derivative transactions with other parts of the firm, Governor Randal Quarles said.

Quarles, the Fed’s vice chairman for supervision, said the Fed’s approach to banks’ inter-affiliate margin on swap trades is more stringent than that of European and Asian regulators — as well as that of the US Commodity Futures Trading Commission.

“We are isolated in doing this,” Quarles told the House Financial Services Committee last week. “I do think it is something that is ripe for us to consider.”