Time for Stability in Derivatives Markets – a New Look at Central Counterparty Clearing for Securities Markets
The recent financial crisis has driven many plans for improving the stability and resilience of the global financial system. One concept, managing the risk of default in securities or financial derivatives markets through central counterparties, receives scrutiny in this report. The author examines the role centralized clearing parties could play in improving system resilience. These centralized clearing parties are institutions that interpose themselves between counterparties in financial transactions. The author offers a new look at what these institutions could achieve in over-the-counter derivatives trading and short-term funding markets. He places the emphasis on the core services they could provide: the diversification of counterparty risk and the redistribution of default losses among its members.
Volume (Year): (2011)
Issue (Month): 329 (May)
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Longworth, 2010. "Warding Off Financial Market Failure: How to Avoid Squeezed Margins and Bad Haircuts," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 135, December.
- Thorsten Koeppl & Cyril Monnet, 2006.
2006 Meeting Papers
513, Society for Economic Dynamics.
- Koeppl, Thorsten V. & Monnet, Cyril, 2008. "Central counterparties," CFS Working Paper Series 2008/42, Center for Financial Studies (CFS).
- Angelo Melino, 2011. "Moving Monetary Policy Forward: Why Small Steps - and a Lower Inflation Target - Make Sense for the Bank of Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 319, January. Full references (including those not matched with items on IDEAS)
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