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.
Timing tension – Europe clearing deadline set to slip
Mandatory clearing in Europe is widely expected to start from next year, but the complex authorisation process, combined with the variety of collateral segregation models, means the start date for some clients could be much later. Tom Osborn reports
Risk USA: Few options to manage CCP exposure, says RBS chief credit officer
Senior executives at RBS have weighed up the bank's potential exposure to CCPs
Start of EU clearing mandate could drag into 2015
Nick Sawyer, editor-in-chief of Risk, and Risk staff writer Tom Osborn discuss the timeline for clearing in Europe, and the tensions this could create with other regulators
CCP frontloading: the pricing nightmare
The pricing nightmare
Clearing Bank of the Year – Citi
Asia Risk awards 2013 winner: Citi – Clearing Bank of the Year
Clearing House of the Year – JSCC
Asia Risk awards 2013 winner: JSCC – Clearing House of the Year
Leverage and CCP capital proposals will hurt clearing – Risk.net poll
Four fifths of respondents to a new Risk.net poll think proposed changes to the leverage ratio and CCP capital rules will make it uneconomical to become a clearing member
Hong Kong lags on Esma equivalence
Esma unable to grant equivalence on Hong Kong's OTC clearing regime as framework is not yet in place
BoE's Tucker wants more robust CCP governance
Bank of England deputy governor Paul Tucker raises concerns over the size and for-profit nature of CCPs
Shadow banking crackdown raises transparency concerns for insurers
National regulators to bring existing rules in line with prescriptive FSB policy recommendations on securities lending
Clearing: Third time lucky
The third US clearing deadline caused relatively little fuss. But the problems that emerged ahead of the first two deadlines haven’t entirely been solved, and some firms sought to postpone their first cleared transactions. Joe Rennison reports
Remembering Lehman: CCPs hardwire collapse into models
Five years on from the collapse of Lehman Brothers, the chaos that followed is now being erased from some value-at-risk models – and clearing houses do not agree on how to prop up their margin requirements. By Tom Osborn
Politically motivated reform creates new risk
Many of the proposed reforms in derivatives market regulation were driven by politics rather than economics. This could lead to an additional source of systemic risk and less effective risk management among end-users, argues David Rowe
ECB’s Russo speaks on CCP policy
Daniela Russo, Director General Payments & Market Infrastructure at the European Central Bank, talks about regulation affecting the operation of central counterparties for OTC derivatives transactions
Acting as a clearing member will be uneconomical – Isda panel
New proposed rules on CCP default fund capital and the leverage ratio will together make acting as a clearing member uneconomical, says industry panel
Sefs questioned on plans for erroneous trades
Swap execution facilities have been rushing to meet an October 2 deadline for registration, but more thought is needed on how platforms will deal with trade failures, say conference participants
Legal uncertainty over netting in China threatens Shanghai QCCP status
Foreign banks operating in China's OTC markets face punitive capital charges
The CCP price: users fear modelling mishaps
The CCP price
European CCP rules stricter than US, says Eurex Clearing chief
Thomas Book, chief executive of Eurex Clearing, says it remains to be seen whether the standards for central counterparties set in Europe will be matched around the globe
CCP regulation needs to be regional, not national: SGX
SGX head of clearing risk urges greater cooperation among region's regulators
Upfront on clearing
Sponsored forum: OTC derivatives clearing
Why CCPs are the new rating agencies – and pose the same risks
A clear alternative?