TMPG Recommends Margining of Agency MBS Transactions to Reduce Counterparty and Systemic Risks
The Treasury Market Practices Group (TMPG) strengthened the existing Best Practices for Treasury, Agency Debt, and Agency Mortgage-Backed Securities Markets to include a recommendation that forward-settling agency MBS transactions be margined in order to prudently manage counterparty exposures. Widespread use of margining for unsettled agency MBS transactions would enhance financial system stability and support market function during periods of market stress.