Fed official slams ‘fantasy’ of CCP default management

McPartland: banks could not support multiple auctions if a big member firm defaults

chicago fed building
Federal Reserve Bank of Chicago

An official at the Federal Reserve Bank of Chicago has described as "fantasy" the idea that clearing house procedures for a default can work as the number of central counterparties (CCPs) in the over-the-counter market increases. The default management process relies on traders who are seconded from surviving bank members.

"Five years from now, someone besides me will realise the default management process for cleared OTC derivatives begins to fall down as the number of OTC CCPs derivatives

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

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 individual account here: