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.
Q&A: William Dudley on global CCP standards
Central counterparties are about to take centre stage in the revamped over-the-counter derivatives markets – a development that has given rise to a set of global principles for their management and supervision. William Dudley, president of the Federal…
SwapClear hits $1 trillion mark for buy-side OTC clearing
A third of the figure was cleared in the last month alone - and volumes are expected to increase rapidly as clearing deadlines approach
Risk & Return Brazil: BM&F Bovespa plans to integrate clearing houses
Plan to combine four clearing houses into one will result in margin efficiencies of 30-40%, the exchange estimates
US farm lenders fear clearing will trip leverage ratio
Posted collateral cannot be used to offset liabilities when calculating farm credit banks' leverage ratio
Dealers pitch loan format for swaps as CVA dodge
Banks are offering to replicate the economics of OTC swaps in loan format - avoiding new capital and clearing rules
NY Fed's Dudley fears CCP capital 'cliff effect'
Supervisors should ensure the capital regime for cleared trades avoids a sudden leap in risk weights, says New York Fed president
HFT adds value to the forex market, says Bank of England
The effects of high-frequency trading activity should continue to be monitored, but the practice adds value to the forex market, argues a senior Bank of England official
Custody Risk summer 2012
Read the summer 2012 issue of Custody Risk
Custody Risk Americas Awards 2012 – Derivatives Valuation Services Provider of the Year: JP Morgan
Derivatives Valuation Services Provider of the Year: JP Morgan
The last word: Collateral and CCPs
The leading question
No improvement in porting since Lehman, CCPs say
The collapse of MF Global last year saw clearing houses struggle to port client collateral to other firms - repeating problems seen after Lehman Brothers filed for bankruptcy in 2008
MarkitServ and Traiana vie to build clearing utilities
Middleware firms set to compete in creation of credit-checking hub - but critics say rival utilities would undermine the service
SwapClear changes expulsion rules
SwapClear changes expulsion rules
LCH.Clearnet splits default fund
LCH.Clearnet splits default fund
New ratings paradigm requires careful handling
The rate escape
Clearing certainty
In depth: clearing certainty introduction
Push, ping or hub: industry tackles risk of clearing fails
Push, ping or hub
Isda AGM: Gensler confident clearing location requirements will not be imposed
Regulators are unlikely to insist local currency trades be cleared domestically, says CFTC chair
Isda AGM: CCPs invited to join determinations committees
Central counterparties have been invited to join the Isda credit determinations committees – but they will not have a vote
Isda AGM: CCPs fear clearing stampede
Market participants now have months, rather than years, until the Dodd-Frank clearing mandate takes effect - and CCPs are worrying about a last-minute rush
Isda AGM: Margin regime ups liquidity risk, buy-side firms warned
Collateral demands will be pro-cyclical - rising as markets become stressed - and will be generated by uncleared as well as cleared trades, DE Shaw treasurer tells Isda conference
Isda AGM: Euro crisis drives up collateral, finds survey
Trouble in the eurozone is increasing collateral in over-the-counter derivatives market, according to Isda
Isda AGM: ‘Life as we know it will change,’ says O’Connor
New regulations will help reduce systemic risk, but changes need to be made to certain parts of the rules, Isda chairman says
US Treasury’s FX exemption hangs in the balance
A year after the US Treasury's proposed regulatory exemption for FX swaps and forwards, the position has never been confirmed - and some believe it may be reconsidered