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.

Risk 25 firms of the future: Introduction

With over-the-counter derivatives markets in flux, picking winners and losers is a tough job. This is where Risk’s editorial team nails its colours to the mast. By Lukas Becker, Matt Cameron, Laurie Carver, Clive Davidson, Ramya Jaidev, Peter Madigan,…

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