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.
Regulators look out for clearing dodges
Out of the clear?
Despite MF Global, firms face weaker OTC safeguards
Segregated thinking
Risk Annual Summit: Central clearing divides buy side
A hammer to crack a nut, or a chance for everybody to win? Buy-side panellists disagree on the merits of central clearing
Mitigating op risks for CCPs post-crisis
To the rescue
Risk Annual Summit: Buy-side firms call for clearing changes
Eligible collateral for CCP margin needs to be reviewed – and regulators also need to ensure the clearing exemption for some end-users is not negated by Basel capital rules, say buy-side firms
Risk Annual Summit: CVA rethink needed, says HSBC risk specialist
Market risk hedges should be recognised when calculating CVA capital charge, says HSBC market risk modelling head
Risk Annual Summit: No answers on how to cope with CCP default, says Pearson
Regulators are looking at how financial markets could be proofed against the collapse of a CCP – but there are more questions than answers at the moment, says the EC’s Patrick Pearson
CFTC rule sounds death knell for FIA-Isda trilateral give-ups
Final rule forbids documentation revealing identities or limiting counterparty choice
Dealers worry about risk of $500bn overnight liquidity drain
Dealers are concerned that intra-day margin call guidelines, which they claim could drain up to $500 billion from financial markets, could make it into final CPSS/Iosco principles
Lack of clarity over buy-side derivatives reporting responsibilities
New derivatives regulation will require all derivatives trades to be reported to trade repositories – but some confusion exists over who has the responsibility to report
US banks could lose competitive edge in Europe, says EIB
US regulations on mandatory clearing and uncleared margin could put US dealers at a competitive disadvantage in Europe, says EIB
South African banks will struggle with CCP default fund requirements, say participants
Default fund contributions will be too onerous for South African banks, say conference participants
Ability to use custodial accounts worries OTC clearing members
Custodial accounts worry OTC clearers
Despite MF Global, firms face weaker OTC safeguards
Segregated thinking
Margin segregation
In depth: segregation introduction
FSA: facing up to cross-jurisdiction conflicts
Juggling across jurisdictions
More sovereigns edge towards two-way CSAs - and clearing
Towards two-way CSAs
Margin rules for uncleared FX rest with regulatory working groups
Regulators must adopt a calibrated approach to mandated collateral so that short-dated FX swaps and forwards are not caught up in the rules unnecessarily, argue market participants
Futures markets could get OTC-style safeguards
Futures market participants expect tougher - and more expensive - collateral protections to be introduced as a result of the MF Global debacle, and the CFTC is ruling nothing out
Singapore’s FX exemption welcomed as a sign of global consistency
A proposal by the Monetary Authority of Singapore to exempt forex swaps and forwards from mandatory clearing is seen as a positive move to harmonise treatment of foreign exchange with the US
CCPs fear prescriptive Esma standards on margin and risk
Esma could take key risk management decisions out of the hands of CCPs, according to new discussion paper on the technical standards required by European clearing rules
LCH.Clearnet’s ForexClear awaits regulatory approval
Forex clearing platform for NDFs is ready for launch, pending regulatory approval, LCH.Clearnet confirmed in its annual report
European CCP group elects Eurex exec as new chair
Eurex's Marcus Zickwolff elected to chair European clearing house group
European capital rules could squash CVA feedback loop
European capital rules could squash CVA feedback loop