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.
BofE's Tucker: weak CCP recovery plans risk mayhem
Panellists at an EC conference in Brussels this morning warned CCPs have made little progress on detailed survival plans - leaving the system exposed
Dealers see danger in CFTC's $50m clearing capital limit
CFTC says 38 FCMs would be able to act as OTC clearing members under $50 million capital limit - but dealers fear it will weaken CCPs, and call for tough membership rules to redress the balance
Standard CSA: Industry's solution to novation bottleneck gets nearer
New CSA, new challenge
FX Week Asia: Options clearing on hold, prime brokers confirm
Forex clearing will be restricted to non-deliverable forwards as US authorities discuss whether settlement risk can be properly managed for cleared forex options, according to speakers at the FX Week Asia conference in Singapore
Emir should include exchange-traded derivatives, says Gensler
CFTC chairman says European regulators should expand scope of Emir to include all derivatives, rather than OTC only
Energy Risk Europe: regulators need to differentiate between banks and non-banks
Regulators should be wary about applying financial market regulation to all end-users, warn panellists
Risk.net poll: CCPs should have access to central bank liquidity
The majority of respondents to an online poll support central bank liquidity access for CCPs, but critics argue this would be likely to lead to the break-up of multi-currency clearers
CCP contest starting to heat up
Give CCPs a chance
Margin models converge as CCPs battle for dealer support
Dealers say they won’t join clearing houses that are not robust – and have already blackballed one central counterparty. As a result, the initial margin methodologies employed by the big rates clearers have begun to converge. Matt Cameron reports
Corporates fear CVA charge will make hedging too expensive
Crunch time for corporates
South African banks grumble over credit pricing discrepancies
To charge, or not to charge?
CCIL: The benefits of fragmentation
Fragmentation benefits
LCH.Clearnet eyes November launch for NDF clearing
London-based CCP is set to launch clearing for NDFs in six currencies in mid-November, having shelved plans for options clearing while banks discuss settlement-related issues with regulators
FIA-Isda group runs rule over Sef credit check plans
The OTC market still does not know how to provide certainty that a trade will be cleared - but an FIA-Isda meeting in New York gave attendees a chance to look at what is on offer
Industry to make 11th hour plea over Emir scope
The EU council text of Emir could be voted through next week, but a group of industry associations will plead for a late - and controversial - change
Energy Risk Asia: Dodd-Frank could hit Asian energy firms hard
Panellists at the Energy Risk Asia conference voice concerns over the extraterritorial implications of the Dodd-Frank Act
Risk.net poll – UK Treasury is right over ECB lawsuit
Respondents to a Risk.net poll support the UK Treasury’s decision to sue the ECB over its proposal to require CCPs clearing euro-denominated contracts to be legally incorporated in the eurozone
Pimco said to be behind OTC clearing spike at CME
Interest rate swap clearing volumes at CME leapt 2,172% between August and September, and dealers say one firm is responsible for the surge
CCPs should be more transparent with margin models, say dealers
Dealers say CCPs need to be more transparent about how they calculate margin – including making their models fully accessible
CCP interoperability not achievable in near term, say clearers
CCP interoperability will not resolve fragmentation in the OTC markets, say panellists at Isda Europe conference in London
ECB policy would shatter big CCPs, critics warn
Plans to have CCPs based in the jurisdiction of the currency they clear would pull apart multi-currency services, experts warn, after UK Treasury challenges ECB
Dealers move to secure derivatives clearing gateways in Asia
Courting counterparties
The product no-one wants to sell: portability held up by lack of rules
Under-the-counter derivatives
CRD IV proposals do not deviate markedly from Basel III, says EC's Faull
Jonathan Faull dismisses suggestions CRD IV will lead to uneven application of Basel III