Client clearing poses acute liquidity risks

Margin jump risk


Energy can neither be created nor destroyed: it can only be transformed from one state to another. A similar principle can be applied to risk. Regulators are putting the finishing touches on rules requiring a large portion of the over-the-counter derivatives market to clear through central counterparties (CCPs), a move they believe will reduce bilateral counterparty credit risk and make the financial system safer. For this structure to work, however, clearing houses must receive vast amounts of

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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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