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.
Swaps CCPs hope to slash capital via margin change
Treating margin as settlement could cut leverage – CME, Eurex, Ice, LCH.Clearnet all seeking approval
Banks try to copy Citi and UBS clearing leverage cuts
Tactic slashes exposure for FCMs, but could undermine lobbyists
Stricter EU collateral rules threaten Nordic power market
Esma move on bank guarantees “risks damaging” liquidity, traders say
EU regulators split over using initial margin to resolve CCPs
Rules on CCP resolution were due last month but are now slated for February
Basel Committee 'will move' to more sensitive leverage ratio
Regulators want to switch CEM for SA-CCR, conference told
Central counterparties in crisis: the Hong Kong Futures Exchange in the crash of 1987
This Forum contribution shows the reader the lessons that can be learned from one of the few occasions in history when a CCP got into severe difficulty.
Eurex and LCH reject one-day margin regime for futures
Decision on whether to copy US rules still in the balance, says Esma
EU members of US options CCP face $30bn capital hit
OCC fears approval will be held up by absence of SEC clearing rules
Treasury repos may hit 20bp under DTCC liquidity plan
Repo CCP's committed liquidity facility could force price hike
Europe edges closer to final Emir clearing timeline
Deadline could arrive in mid-June; pressure to resolve EU-US dispute grows
Irish central bank warns of swaps market shut-out
Official says current clearing capacity “will be saturated” by Emir demand
LCH.Clearnet considering repo lines to pension funds
CCP talking to pension funds about becoming direct repo counterparty
Fears mount over CCP client porting
Shrinking pool of FCMs could undermine efforts to port client positions in a default
CFTC’s aim is 'not just' to expand clearing, Massad says
Agency will not “mandate a lot of products just to increase clearing”
No need for repo CCP in Australia, RBA says
Central bank says no financial stability case, and costs would be high
BoE questions unfunded CCP default fund top-ups
Funds would have to be replenished during period of stress
Fed support high on wish list for buy-side repo clearing
Risk USA panellists want liquidity support for planned new services
Clearing houses reject standardised 'skin in the game'
Overly punitive requirements on CCPs could skew incentives
Eurex head dubs CCP link-up fans 'liquidity have-nots'
Eurex and EuroCCP chief executives clash over merits of interoperability
Buy side mulls new Eurex direct clearing model
Agency-style arrangement may cut clearing costs, but regulators wary
Pension funds press for central bank repo backstop
Bank of England support seen as 'only' option to ease collateral fears
Q&A: CFTC’s Massad on cross-border conflicts
Regulator seeks to avoid repeat of CCP stand-off for trading rules
Expected delay to non-EU CCP approval risks frontloading panic
Lawyers fear scramble to close out trades
The Clearing House takes aim at CCP risk governance
Banks call for audit trails and beefed-up role for risk committees