Net benefit

Meant to minimise counterparty risk, the idea of clearing for credit derivatives has been riddled with questions from the outset. But new research suggests the plans might actually increase counterparty exposures. Mark Pengelly investigates


Concern about counterparty risk has led regulators to push for credit default swaps (CDSs) to be cleared via central counterparties. Since dealers first met to discuss the idea in early 2007, the road to central clearing for credit derivatives has been tortuous, with many ups and downs. Operational and technological challenges have been formidable, while the process has even ushered in a set of wholesale changes to standard CDS documentation and trading conventions (Risk April 2009, pages 18-221

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Switching CCP – How and why?

As uncertainty surrounding Brexit continues and the impacts of Covid-19-driven market volatility are analysed, it is essential for banks and their end-users to understand their clearing options, and how they can achieve greater capital and cross…

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