Dealers hope for replication of BoE move to two-way CSAs

Bank of England building in London

Next year, the Bank of England (BoE) is expected to begin posting collateral to its counterparties when trading derivatives on behalf of the UK government, in a step change that many hope will be replicated by other central banks. With months to go until the central bank makes the switch, foreign exchange traders see the change as a particularly important one, given the potential funding costs that can fall on dealers if collateral is not posted. The BoE announced in June it would start using