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Tag central clearing

Better Central? Central Clearing and Counterparty Risk in OTC Markets

What is the relation between central clearing and counterparty risk? Intuitively, it seems clear that a central clearing counterparty (CCP) improves the netting mechanism. With bilateral clearing, two trading partners can only net with one another. With central clearing, the… Continue Reading →

Big Risks with Small Price Impact – Counterparty Risk Management in CDS

Why the discussion about central clearing of credit default swap (CDS) contracts? For one thing, central clearing increases transparency. Once transactions have to go through a central clearing counterparty (CCP), the regulator can simply monitor the CCP to get an… Continue Reading →

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