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.
Pensions industry says permanent Emir exemption not enough
European Parliament and UK regulator push for carve-out, but industry unimpressed
CCPs seen as reluctant to report cyber attacks
Clearing houses urged to share information in aftermath of cyber security lapses
Firms weigh impact of blockchain on post-trade services
Opportunity for using distributed ledgers in OTC market discussed at meeting held by CFTC
Tensions at for-profit CCPs could put them at risk
Demutualised CCPs must find a way to keep clearing members engaged in risk management
EU-US clearing deal ‘good enough’ to avoid CME exodus
Banks had planned to quit US clearer on February 21
Mixed industry reaction to Moody’s CCP ratings
Clearing members say narrow definition of default may limit ratings’ usefulness
Cyber risks are silent, deadly and often mundane
Fear of submarine-like attack overshadows more dangerous, less scary cyber threats
Looming EU-US deal on clearing gets cool welcome from banks
Proposed European rule change will raise risks and costs of clearing, critics fear
Fresh delay for EU rules on CCP spillover losses
Recovery and resolution rules will miss the revised February delivery date
Energy firms urge EC to ease Emir clearing rules
Review highlights concerns over impact of clearing on nonfinancials
FSB's predecessor 'failed miserably' ahead of crisis – Andresen
Secretary general says FSF failed to act on known risks surrounding resolution and securitisations
Banks test promise of blockchain as CCP replacement
“You can imagine a world where you don’t need clearing houses,” says senior banker
Collateral or settlement: capital cut rests on role of VM
Questions about status of variation margin are more than semantics
The ideas on offer to calm buy-side repo fears
Comprehensive solution to the challenges pension funds will face under central clearing remains out of reach
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