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.
Margin rules lead to NDF clearing surge
Banks look to finally clear forex products, but options remain a challenge
Loan danger: CFTC sees systemic risk in margin financing
Combination with net margin posting at EU CCPs could leave clearing members on the hook
Dependence on collateral raises vital research questions
Areas of focus should include collateral supply, reuse and circulation
EU net margin rules are riskier than US regime, warns CFTC
Commission’s Bandman raises margin financing as emerging systemic risk to CCPs
Margin rules push interdealer inflation swaps to clearing
Traders say 95% of the market now cleared, compared with 10% a month ago
Year-end deadline for fixing CCP recovery plans 'not realistic'
Some central counterparties are unable to maintain a continuous 'cover two' standard
HKEx: real-time settlement key to cross-currency swap clearing
JSCC and KRX also said to be working on cross-currency swap clearing offerings
Cat bonds can help combat the systemic risks of CCPs
Bonds could pre-fund CCP default funds and higher margins during market stress, authors argue
Esma buys time to fix broken client clearing chains
Two-year clearing delay for small firms might allow indirect model to be built
BoE researchers outline risk of collateral collapse
In stress periods, collateral chains could break, paper warns
MVA: swaps scale new heights in complexity
Banks are turning their attention to calculating a new derivatives valuation adjustment
Opened interest: foreign firms eye China's rate swap market
However regulatory and operational challenges set to slow growth
Experts question CPMI-Iosco cyber guidance
Speedy settlement and resumption of services after cyber attack could be counterproductive
Shanghai to be first CCP to clear forex options
New service to debut in August, but liquidity risk has stalled other CCPs
Supervisors split over flexibility in CCP resolution
European regulators square off over predictability of spillover losses
CCPs and Brexit: don’t forget the rest of the world
Losing equivalence with the US could be more serious than arguments over the location of euro clearing
MVA transfer pricing
Wujiang Lou extends liability-side pricing theory to initial margin
Not so fast, François: EU clearing land grab is complex
ECB cannot (yet) make post-Brexit demand for euro clearing to leave London
EC to hold crunch talks on CCP recovery and resolution
European Commission said to be close to unveiling proposal on stricken clearing houses
Standardised CSAs: no longer a matter of choice
Dealers again seeking simpler terms after 30% drop in non-cleared notionals
Interview: Iosco’s Andrews stresses CCP resilience and recovery
CCP resolution spells regulatory failure; guidance to follow on PFMIs and CCP stress-testing
CME warns some fintechs ‘miss the point’ in clearing
IDX panellists see reduced operational role for CCPs that will instead act as trusted oracles
LCH-JSCC basis to boost XVA acceptance in Japan
Prices now "can't be explained without reference to XVAs", says Nomura credit head
EU could go it alone on leverage ratio, says MEP
Swinburne says clearing should be shielded from ratio “if Basel does not deliver”