Risk Derivatives Summit : EC backs multiple CCPs

Multiple central counterparties for clearing derivatives trades might be less efficient, but stability concerns make a single counterparty too risky to allow, a European Commission (EC) specialist said today.

Speaking at the Risk Derivatives Summit in London today, Sebastijan Hrovatin, a policy officer in the EC's financial market infrastructure unit, said that while "from a purely economic perspective, one central counterparty (CCP) makes sense – it would be more efficient in managing collateral and so on", it would create larger problems than it solved.

He pointed to the risk that a clearing monopoly would become inefficient and costly because of lack of competition, and added that national

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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.

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