Taking the slow road

Recent developments suggest that clearing is likely to gain widespread acceptance in the European energy market. Market participants feel it is a question of how and when – not if – robust, liquid solutions will emerge. By Joe Marsh

While clearing has yet to gain serious momentum in Europe, the building blocks are gradually falling into place. London Clearing House (LCH) merged with Paris-based clearing house Clearnet in December. At the same time, Amsterdam’s APX Group signed an agreement to acquire London energy exchange UKPX, while LCH Clearnet will clear longer-dated gas and power contracts for UKPX from mid-2004 (see box, p.49).

Meanwhile, UKPX has extended its over-the-counter (OTC) clearing and notification

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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