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BRUSSELS-Proposed EU rules on derivatives could take $85.8 billion (€65 billion) of working capital away from Europe’s economy by requiring property businesses to collateralize interest rate hedges with cash, according to the locally based European Public Real Estate Association.

Businesses deemed to be financial entities must post cash collateral into margin accounts to provide cover against default. Non-financial businesses, which use derivatives for hedging commercial risks, are excluded. However, property firms risk being misclassified as financial and subject to the onerous margin calls.

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