HSBC, StanChart face capital hit on cleared renminbi trades

Lack of UK recognition for Shanghai Clearing House could prompt banks to reduce exposures

HSBC and StanChart face capital hikes on derivatives exposures montage

HSBC and Standard Chartered are facing big capital hikes on their derivatives exposures at Shanghai Clearing House at the end of the year as a post-Brexit temporary clearing house recognition regime comes to an end.

The Bank of England has yet to say whether it will extend recognition, prompting concerns that capital requirements on the two banks’ interest rate, foreign exchange and commodity derivatives exposures to the Chinese clearing house will rise significantly at year-end. To account for

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