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.
Sovereigns wrestle with debt impact of CSAs
Kiss of debt
Voluntary commitments take back seat to Dodd-Frank
Losing commitment
Multi-currency CSA chaos behind push to standardised CSA
The evolution of swap pricing
CLS considers membership category for CCPs
"Allowing CCPs to settle FX trades bilaterally would reintroduce Herstatt risk, so it would certainly be preferable to have CCPs become either direct or third-party members of CLS," says LCH.Clearnet executive
Nasdaq OMX to launch Nordic swap CCP
Stockholm-based service already has Swedish debt office on board. Launch planned for second half of 2011
Fed’s Tarullo outlines OTC derivatives reform agenda
Federal Reserve governor Daniel Tarullo stresses importance of central counterparties, close scrutiny of market participants
CLS committed to settlement risk mitigation under new regulations
68% of respondents to FX Week online poll believe CLS should be central clearer for FX products, but CLS insists it remains focused on mitigating settlement risk
Draft European clearing rules threaten Eurex business model
Analysts warn Council of the European Union proposals could hurt trading revenues at Eurex, as its owner, Deutsche Börse, pursues merger talks with NYSE Euronext
Langen report: clearing rules will only apply to new trades
European Parliament calls for existing derivatives trades to be excluded from clearing rules, but proposes wider exemptions for public-sector bodies
Central banks accused of collateral hypocrisy
Despite the funding risk it creates, central banks still refuse to sign two-way collateral agreements
Regulation
Special report
A clash over CCP membership
Caps in hand?
Confusion over CCP default fund charge
CCP charge confusion
Capital rules for CCP exposures could make clearing costs punitive, dealers conclude
New Basel risk weighting must be reduced, industry says
Dealers at odds with CME over use of third-party marks
One major dealer says it may reassess CME membership, while others also raise concerns about the CCP’s willingness to allow clearing members to use third-party marks
LCH.Clearnet 'shocked' at Dodd-Frank capital requirement
Firm might not be able to live with 99% reduction in minimum capital requirement under Dodd-Frank Act, says chief executive
ECB opinion on derivatives reform spurs debate on CCP liquidity resilience
French authorities welcome ECB's call for the resilience of central bank money to be recognised in EU derivatives legislation.
Isda pushes back on CCP ownership caps
Industry groups oppose limits on dealer stakes in clearing houses
HKEx moves to introduce margins for cash clearing members
HKEx plans to beef up its risk management following the bankruptcy of Lehman Brothers in September 2008 by introducing margin rules and seeking more funds from cash clearing members. The move would bring cash clearing more in line with existing…
Risk Forum: client clearing - a clear market move
A clear market move
Basel Committee tweaks counterparty risk rules
Basel Committee makes alterations to counterparty credit risk rules
CFTC proposal sparks scrap over CCP membership
CFTC proposal sparks row over CCP membership
