CCP
WHAT IS THIS? A central counterparty (CCP) manages default risk by collecting initial and variation margin from both parties to a trade. Spill-over losses are absorbed via a default fund to which all members contribute – introducing a degree of mutualised risk – and by the CCP’s own capital. The concept is an old one that was extended to over-the-counter derivatives in the aftermath of the financial crisis.
CCP models vulnerable to Trump risk
Volatility of ‘will he, won’t he’ tariff strategy could confound clearing house risk models
Iosco chief defends margin transparency standards
More reporting will improve financial system’s resilience, argues Rodrigo Buenaventura
Clearing members welcome LME default fund cap
But 2022 nickel crisis still makes hedge funds doubt banks would foot the bill for default at all
EU racing to comply with active account rules
Industry wants simpler route to exemptions ahead of ‘challenging’ deadline for new clearing regime
JSCC plans to open JGB clearing to foreign investors
Clearing house aims to boost cleared market liquidity in Japanese government bonds
CFTC acting chair: ‘We don’t need a Dodd-Frank for crypto’
US regulator wants real-time market surveillance; focuses on rise of liquidity risk
Large banks safer for CCPs than they get credit for
Plentiful pre-positioned liquidity softens the blow of resolution, new research argues
Fate of US Treasury clearing deadline to be decided at crunch meeting
Isda chief predicts delay as clearing houses await confirmation of go-live dates
Clients’ share of IRS clearing margin hit record high
Data from CME, Eurex and LCH shows clearing members’ house IM fell in January, pushing client proportion to 67.7%
JP Morgan, Eurex push for DLT-driven collateral management
The high-stakes project could be a litmus test for the use of blockchain technology in the capital markets
US Treasury clearing mandate poses riddle for Asian markets
Participants unclear on how far the rules will reach, or the role of inter-affiliate exemptions
Margin standards are here – and clearing firms aren’t happy
Clearing members complain that latest transparency proposals would force them to act as middlemen by providing margin simulation tools for clients
Bank of England wants dynamic Emir for UK clearing houses
Review won’t just photocopy EU legislation, as BoE seeks to make rules simpler and adaptable
Buffer stop: Eurex clearing members shunt default fund
Clearing house’s CRO says both members and clients opt to pay more margin instead
Osttra to launch Treasury clearing middleware
Mid-year delivery expected for system that aids credit checking for repo trades
Banks divided over CME’s done-away model for UST clearing
Buy side could give thumbs-up if questions on margin protection and guarantee fees are answered
US MMFs clear record one-third of repos via FICC
Trades executed through sponsored access hit a $865 billion high at end-2024
Dissecting initial margin forecasts: models, limitations and backtesting
The authors demonstrate that initial margin is not value-at-risk, but its approximation, and suggest a generic backtesting and verification framework that accommodates both forecasting limitations and existing models.
FCMs welcome CFTC margin rule ring-fencing clarification
Final rule on separate accounts replicates no-action relief as Republicans strip out gold plate
CPMI-Iosco report highlights gaps in CCPs’ variation margin practices
Survey finds only a third implement VM pass-through, just 15% net client and house accounts
Treasury clearing timeline ‘too aggressive’ says BofA rates head
Sifma gears up for extension talks with incoming SEC and Treasury officials