Clearing members fear $5 billion intra-day funding burden

The intra-day funding burden

michael-davie

It's a clearing house risk manager’s nightmare – a day has passed since it last collected margin from its members, markets have tanked, and there is a margin gap that won’t be filled because two member firms have filed for bankruptcy overnight. To cover the losses, the central counterparty (CCP) will have to draw on the initial margin reserves posted by the defaulting firms, and if markets continue to swing, the damage could spill into the rest of the CCP’s default waterfall.

That’s why most cle

To continue reading...

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 indvidual account here: