Foreign banks face tougher collateral demands in China
BEIJING - Chinese banks, increasingly wary of the credit risk of their foreign counterparts, want more collateral from western banks as well as parent company guarantees for derivatives trades conducted by locally incorporated foreign banks.The demands, which many foreign banks find unpalatable, are not being met so far, and large parts of the over-the-counter derivatives market in China have ground to a halt.
Local banks are pressing their case through the use of their own derivatives master
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