Indeed, there is even an argument for capitalizing new ideas, such as different ways of organizing production, that enhance the value of a firm without any associated outlays. Some analysts judge the size of undercapitalized outlays as quite large.1 The important point, however, is that decisions about which items to expense will have important consequences for reported earnings.
What the counterparty is buying is an instrument that is backed by encumbered Government securities. I would be glad to hear your views on this debate. Treatment of derivatives under NSFR is being actively debated internationally. Further, margin requirement for OTC derivatives is another area that is being widely discussed.