FIA has responded to the Financial Stability Board’s consultation on Liquidity Preparedness for Margin and Collateral Calls. The FSB consulted on eight policy recommendations aimed at enhancing the liquidity risk management, collateral management, and stress testing practices of non-bank financial intermediaries (NBFIs).
FIA’s response highlights several key points for international standard setters to consider including:
- The importance of margin transparency and simulation tools from Central Counterparties for NBFIs.
- The need for a balanced regulatory approach to ensure compliance with FSB recommendations without overburdening clearing members.
- Caution in the shift towards using non-cash collateral for Variation Margin calls due to potential impacts on clearing operations and risk management.
Read the response in full.
