Aside from the costs associated with initial margin, one of the problems the market is facing is that not all the products have been cleared at the same time.
I am only at risk for one day's price movement in grain, and we both post initial margin payments that are supposed to be enough to cover any one-day move.
The leverage ratio requires banks to hold a minimum amount of capital relative to their total exposure, which includes initial margin received from clearing clients.
It requires initial margin, which is designed to protect against potential future loss on a default, as well as variation margin, which serves as mark-to-market protection.
It calculates the likely loss in a set of derivative positions (also called a portfolio) and sets this value as the initial margin payable by the firm holding the portfolio.