Leverage ratio begins to bite for FX derivatives

dollar-squeeze-leverage

The price of trading foreign exchange derivatives via a prime broker (PB) could increase to as much as $85 per million for clients when banks start charging for the higher cost of servicing the supplementary leverage ratio (SLR) requirements, according to PBs.

The rules are part of the Basel III capital reforms that are sweeping their way into FX markets and changing the economics of the banks providing credit and balance-sheet services to clients. This is because the SLR assumes the business ri

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