Contingent capital solutions mooted for CCPs

Default insurance has been explored by at least one clearing house, but capital markets solutions may be a better way to supplement existing safeguards, say some participants


With clearing house volumes set to increase dramatically this year, some market participants are betting there will be demand for additional pools of capital to back them – and one firm is already touting a contingent structure that would enable a central counterparty (CCP) to call for extra equity capital from a group of investors at its own discretion.

"We are offering a contract that will allow a CCP to call upon a pre-agreed amount of liquidity from our investors – in cash, securities or any

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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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