Dodd Frank Collateral Exposure for a Bank

Bank Derivative Holdings = $ One Trillion

Initial Margin 10% = $ 100 Billion

Variation Margin 1%-5% = $1 to $ 5 Billion

Collateral Management is a new business process requiring investment and technology.

Bank Reorganization may be needed.

New interbank collateral trading processes need to be implemented with resultant trading agreements.

New business area for interbank brokers and central bankers.

 

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