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.
Unlevel playing field for CCP members concerns banks
Under the bar, over the top?
Dealers resigned to CCP competition in Asia
Gaining interest
Polish OTC clearer aims for 2012 launch as Europe fragments
Another central counterparty plans to launch in Europe, starting with zloty-denominated interest rate swaps
CFTC urged to raise bar for CCP stress tests
Market participants say CFTC proposals should be more detailed, more prescriptive
EU Council leans towards special treatment for FX
Industry's concerns starting to be reflected in legislation proposals
Basel Committee may adjust 'blunt' CCP default fund capital
Netting treatment in controversial current exposure method is up for discussion at an April stakeholder meeting, but regulators reject other criticisms
Clearing back-loading provision removed from latest EU Council text
Council removes back-loading provision in Emir proposal
SGX could expand clearing to Australia post ASX merger
SGX could expand its OTC clearing service to the Australian market once a decision has been made on a merger with ASX, but it also plans to add new currencies and asset classes – including forex forwards
CPSS-Iosco proposes risk standards for CCPs
Central counterparties should be ready for failure of one or two largest customers, regulators suggest
Sovereigns wrestle with debt impact of CSAs
Kiss of debt
Voluntary commitments take back seat to Dodd-Frank
Losing commitment
Multi-currency CSA chaos behind push to standardised CSA
The evolution of swap pricing
CLS considers membership category for CCPs
"Allowing CCPs to settle FX trades bilaterally would reintroduce Herstatt risk, so it would certainly be preferable to have CCPs become either direct or third-party members of CLS," says LCH.Clearnet executive
Nasdaq OMX to launch Nordic swap CCP
Stockholm-based service already has Swedish debt office on board. Launch planned for second half of 2011
Fed’s Tarullo outlines OTC derivatives reform agenda
Federal Reserve governor Daniel Tarullo stresses importance of central counterparties, close scrutiny of market participants
CLS committed to settlement risk mitigation under new regulations
68% of respondents to FX Week online poll believe CLS should be central clearer for FX products, but CLS insists it remains focused on mitigating settlement risk
Draft European clearing rules threaten Eurex business model
Analysts warn Council of the European Union proposals could hurt trading revenues at Eurex, as its owner, Deutsche Börse, pursues merger talks with NYSE Euronext
Langen report: clearing rules will only apply to new trades
European Parliament calls for existing derivatives trades to be excluded from clearing rules, but proposes wider exemptions for public-sector bodies
Central banks accused of collateral hypocrisy
Despite the funding risk it creates, central banks still refuse to sign two-way collateral agreements
Regulation
Special report
A clash over CCP membership
Caps in hand?
Confusion over CCP default fund charge
CCP charge confusion