Redefining the Target Operating Model for Non-cleared Derivatives

Now that more realistic timelines have been announced for implementation of non-cleared derivative margin reform, banks are focusing on how to re-shape their business operating models to allow derivative desks to remain commercially viable in the post-compliance world.

The most fundamental consequence of the rules for banks is the impact on the ongoing profitability of many business lines due to increased costs of doing business, particularly from the need to bear the cost of funding substantial IM requirements. When these are taken together with increased capital charges (across market risk, counterpart credit risk and liquidity risk) there is a material effect on the overall Return on Equity and headline profitability for many banks.

Nick Newport, Managing Director of risk management consultancy InteDelta, outlines the path which leading banks are taking in this area.

Within this paper we include a detailed table providing an outline of those areas of organisation and business process which will impacted by these regulations across: Front Office, Risk Management, Collateral Management, Operations, Legal, Finance and Treasury.

To learn more about this report or InteDelta's service offering within this space please do not hesitate to contact us on +44 (0)20 7294 7745. Alternatively, please e-mail us at

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About InteDelta

InteDelta combines a structured consulting approach with subject matter expertise to support a global client base to implement risk management best practice. Our areas of expertise cover the major risks faced by financial institutions: credit, market, liquidity and operational risk, alongside niche specialisms such as collateral management and regulatory change. Our clients have a global spread, ranging from some of the world’s largest banks and asset managers to developing market banks, hedge funds and risk software vendors.

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