Risk Derivatives Summit : EC backs multiple CCPs
Multiple central counterparties for clearing derivatives trades might be less efficient, but stability concerns make a single counterparty too risky to allow, a European Commission (EC) specialist said today.
Speaking at the Risk Derivatives Summit in London today, Sebastijan Hrovatin, a policy officer in the EC's financial market infrastructure unit, said that while "from a purely economic perspective, one central counterparty (CCP) makes sense – it would be more efficient in managing collateral and so on", it would create larger problems than it solved.
He pointed to the risk that a clearing monopoly would become inefficient and costly because of lack of competition, and added that national
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