A clash over CCP membership
The Commodity Futures Trading Commission has proposed a $50 million cap on minimum capital requirements set by CCPs on clearing members. Major dealers and clearing houses claim regulators risk undermining the strength of CCPs, but smaller firms that want a piece of the clearing pie say this is nonsense. Matt Cameron reports
Central counterparties (CCPs) have become the ultimate too-big-to-fail institutions. Already responsible for trillions of dollars worth of risk, new regulations will force an even greater share of the over-the-counter derivatives market through clearing houses – and by doing so, create a small number of institutions that are vitally important to the financial system. Any loosening of CCP risk standards, no matter how small, is therefore bound to raise eyebrows. A recent suggestion by the
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