With regard to systemic counterparty risk reduction the bank regulators' minimum capital, liquidity reserve and margin levels are a major incentive. The current fine-tuning debate and regulatory rule adjustment are understandable given the financial implications.
By contrast the lack of discussion of clearing mandates might imply they are a straight systemic counterparty risk win through promotion of consolidation, netting and margining in CCP facing portfolios. Unfortunately it is not that simple - clearing mandates also entrenching bilateral counterparty risk by limiting key risk reduction techniques.
Here I explore these limitations and suggest some solutions.
The European Securities and Markets Authority (ESMA) has today issued the 12th update of its Q&A document on the implementation of the European Markets Infrast
Rocket 3 is now available as an on-line edition formatted for tablets and computer screens.
The Rising Cost of Trade Reporting: Can Firms Afford to Stay Compliant?
With financial institutions increasingly adapting to regulatory demands and expectations, risk professionals face additional burdens to ensure industry standards are upheld alongside further challenges with emerging risks.
Imagine an IRS and a Bund Future cleared within two CCPs, or both cleared at Eurex via PRISMA to achieve cross-margining. The resulting drop in IM is dramatic.
Mark Croxon may have the best beard in Finance, but won't for much longer - if you can sponsor his shave-a-thon he'd be grateful.
Reader statistics were last provided on the 12th of December, and we’re pleased to announce we now have more than 2,000 registered readers, including 344 new readers since our last report in December 2014, in addition to casual daily visitors.
In my last article I reviewed the SEC’s final and proposed rules on transaction reporting by market participants. In this article I will look at the final rule on SDRs, and make some observations on the effectiveness of current and future reporting regimes.
NetOTC updates it's website to describe two new services to address the un-cleared OTC market
One of the biggest challenges for both the Buy Side and Sell Side with the introduction of mandatory OTC Clearing is the posting of the required collateral for initial margin requirements at the clearing house on a daily basis.
Margin and collateral efficiency have been two of the most frequently discussed topics over the past year or two and will continue to be so for some time. Why is this topic so important? Simply put, the market as a whole is going to need more collateral, and will have to learn to deliver it with greater frequency and efficiency. This article summarizes the key suggestions on how to address these challenges.
The timing of the Bilateral Margin rules has moved to September 2016, along with a phase in period for the requirement to exchange Variation Margin.
From London Loves Business, 10th February 2015
Research paper on 'crowded trades' suggests under-margining in certain cleared market scenarios.
Agenda, Speakers and Sponsors Update | Come along and Participate
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