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.
Questions raised about CCP collateral
Bank collateral managers raise concern about wrong-way risk in clearing house collateral
Overview of US regulatory reforms
US legislators are shoring up a range of sweeping financial regulations to tighten derivatives trading. Pauline McCallion provides an overview to the regulatory changes in the pipeline
Energy firms face capital adequacy squeeze
Impending regulation changes will have a profound impact on the operational side of the energy markets as energy companies face capital adequacy issues. Lianna Brinded investigates how companies will cope and what repercussions the changes will have on…
US regulatory reform reaches tipping point
It's not quite over yet, but the text of the Dodd-Frank bill has been agreed and derivatives users have cause for both celebration and concern.
Are the CFTC, SEC and Fed equipped for their new powers?
Despite a last-minute hitch, the final text of ambitious financial regulatory reform legislation was agreed last month, which would hand supervisors sweeping new powers over financial institutions. But are regulators equipped for their new…
Nordic markets warm to central clearing
Regulators across the globe are intent on forcing over-the-counter derivatives through central clearing. How are supervisors in the Nordic region responding, and could the relative lack of liquidity in domestic markets hamper their efforts? By…
Profile - Federal Reserve Bank of New York's Theo Lubke
The Federal Reserve Bank of New York has been shepherding global efforts to improve the over-the-counter derivatives market since 2005 and continues to push dealers to improve in areas such as transparency and central clearing. Theo Lubke, senior vice…
Energy companies face up to clearing requirements
Elimination of a catch-all clearing exemption in US financial reform legislation looks like bad news for big energy companies – the industry warns mandatory derivatives clearing will do untold harm. Peter Madigan reports
Derivatives clearing: a selection of coverage from Risk.net
Derivatives clearing is one of the hottest regulatory topics at the moment around the world.
Experts examine US power clearing and netting needs
As the US Congress moves to boost derivatives clearing requirements, an industry panel has called for regulators to investigate a move towards clearing and netting across US power markets and to clarify the legal uncertainty in the area
BIS position on OTC clearing eligibility at odds with EC
BIS top economist suggests all OTC derivatives could be standardised and sent to CCPs, but EC favours a more measured approach to determining clearing eligibility.
EC derivatives consultation stops short of detail on corporate exemptions
Long-awaited derivatives proposals focus on standards for central counterparties that clear OTC derivatives.
Asian supervisors look to central clearing
Clearing the way
Funding valuation – a clear and present future
In this roundtable, three leading swaps dealers discuss the changes in derivatives pricing – and in particular, the use of OIS as a discount rate for collateralised derivatives trades.
European derivatives draft to be published for consultation within days
EC derivatives legislation set to be far more detailed than US financial reform bills, and open to industry comment before final adoption.
Financial reform to be decided in US
US financial reform edges closer as legislators prepare for the reconcilation of the House and Seante bills
Dealers and legislators left disappointed by CPSS-Iosco recommendations
Proposals on risk management by CCPs should be more detailed, say participants
Asia plays catch-up on CCPs
While European and US regulators blaze a trail in over-the-counter derivatives reform, Asian supervisors have been much more circumspect. Some are now exploring the use of central clearing but many are still wrestling with how best to implement it. Matt…
Highland Capital boss slams shorting restrictions for exacerbating volatility
Credit fund veteran Mark Okada says Bafin restrictions on short selling have increased market volatility
15 minutes with: Eric Litvack, SG CIB
SG CIB's Eric Litvack talks to Risk about the implications of evolving rules on bank capital and OTC derivatives.
FSA’s Huertas says ending ‘too big to fail’ is the top regulatory issue
Regulators mull over intervention options for systemic risk firms
Industry disappointed by lack of clout in CCP standards
Dealers complain a long-awaited draft of standards for derivatives clearing platforms fails to address key issues.