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.
Stuck in the muddle
Regulators in the US and Europe are making efforts to extend central clearing to all asset classes. However, dealers argue that central clearing does not make sense for foreign exchange. By Alastair Marsh
Corporate concessions
Corporates have argued initiatives to introduce over-the-counter derivatives regulation in the US and Europe will severely hamper their ability to hedge. After an intensive lobbying effort, the politicians appear to be listening. Matt Cameron reports
Eurex cuts no Ice
The July 31 deadline for central clearing of credit default swaps in Europe was successfully met by dealers and clearing platforms. Both Eurex and IntercontinentalExchange have launched clearing services in Europe, but take-up for Eurex’s has so far been…
Buy-side battle
Central clearing has dominated the agenda of credit derivatives dealers this year. With regulators pushing for buy-side firms to have access to clearing platforms, dealers and clearing houses are finding there is a great deal of work still to be done…
Industry responds to EC derivatives proposals
Three industry bodies have offered overall support for the European Commission's proposals for derivatives markets, but opposed measures they claim could be detrimental to over-the-counter trading.
A state of flux
Efforts to improve the risk architecture for the derivatives business in Asia appear more muted than elsewhere, with many regulators in the region taking a wait-and-see approach towards central counterparty. But, as Duncan Wood reports, there are some…
Get connected
Regulatory demands for the derivatives industry to improve operational efficiency have become increasingly stringent in the past year. To meet the targets, dealers say interoperability between technology platforms is vital. But in the competitive vendor…