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.
Repo tokens won’t be cleared. Or will they?
Uncertainty lingers over clearing status of tokenised Treasuries, with decision likely devolved to DTCC
Larger EU players move slower on clearing relocation, says Esma
Active accounts rule driving smaller firms onshore; regulator ready for bigger role if lawmakers want
Have CCPs got better at absorbing shocks?
Data suggests most CCPs weathered the Iran-war disruption, but shock frequency is starting to bite
Clearing members want more from HKEX on collateral rates
The CCP has cut handling fees on posted margin, but is still paying members less than global peers
CCP liquid resources pivot to secured commercial bank cash
Eurex, CME and ECC drive jump in reverse repo-linked liquidity buffers in Q1
CCP liquidity risk measures hit highs in Q1
LCH, HKEX, JSCC and OCC set payment obligation records
Iran turmoil lifts CCP margin to new peak
Ice, JSCC and ECC among clearing houses posting sharp Q1 increases
OCC default fund plans expose rift between clearers
Retail brokers – but not Robinhood – oppose new allocation of default fund contributions amid options surge
Commodity CCPs buck trend with IM breaches in Q1
Precious metals and energy clearing units stand out, as most CCPs avoid breach surge despite Iran war turmoil
Many Eurex accounts remain inactive as reporting deadline looms
More than 80% of euro swaps clearing accounts opened by buy-side firms are yet to see any activity
Iran war drives record CCP margin calls
NSCC, CCIL and CME among clearing houses reporting peak VM and IM calls in Q1
Clearing banks pick holes in VAR-based CCP margin models
New models ease cliff effects, but banks say they are less predictable and prone to undershooting
We won’t copy UST clearing mandate wholesale in UK – BoE
Senior official also indicates that any minimum repo haircuts will likely be calculated at portfolio level
Clearers face heavy lift on CME-FICC cross-margin service
Dual registration and regulation plus uncertainty over close-outs all weigh on client offering
Bank of England softens tone on CCP cross-product margining
Breeden supports margin efficiencies to encourage more repo clearing, but still warns on leverage
ECC risk chief says Iran crisis will not delay VAR transition
Incorporating 2022 Ukraine shock ensured new margin model is robust in face of energy volatility
Esma supervisory switch could become ‘distraction’
Push to transform watchdog might hinder market reforms, say some
UK banks add £7.4bn of CCR RWAs
Barclays and Standard Chartered drive counterparty credit risk surge in Q1
Eurex short-term rates volumes collapse on Iran volatility
Surging yields, options hedging activity and revamped incentive schemes drive record volumes at Ice
For Esma the supervisor, people power will be prime
Industry hopes to avoid people risk during transition, with help from national authorities
EU task force boss calls on NCAs to wield their powers to meet T+1
Europe’s disparity will add to command hub’s challenge to match US co-ordination feat, says Giovanni Sabatini