Pimco Urges Basel to Fix Rules Before Swaps Market Disruption
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Pacific Investment Management Co. is urging regulators to rethink bank-capital requirements because they threaten market stability.
The capital requirements in question were released last year by the Basel Committee on Banking Supervision. Banks hold collateral from their customers in derivatives trades that are backed by clearinghouses to protect against losses. The regulators, however, didn’t allow this margin to be treated as a buffer that reduces a bank’s overall risk.