Can CCPs zone in on improved margin buffers?

Dynamically adjusting margin add-ons could reduce cyclical funding demands

Digital connections

‘Save for a rainy day’ goes the idiom, encouraging people to save in good times to better manage difficult ones. In much the same way, central counterparties (CCPs) use margin buffers to prevent collateral demands from spiking during volatile times, helping reduce funding draws on their members. Still, some industry representatives argued that CCP margin buffers may not be appropriately sized.

One solution would be sizing them by tying them to relevant risk factors and/or having predefined

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

Digging deeper into deep hedging

Dynamic techniques and gen-AI simulated data can push the limits of deep hedging even further, as derivatives guru John Hull and colleagues explain

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here