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Can Broader Access to Direct CCP Clearing Reduce the Concentration of Cleared Derivatives?

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Abstract

In November 2008, at the height of the global financial crisis, leaders from the Group of Twenty (G20) nations, representing the world’s largest economies, convened in Washington, DC, to develop a new regulatory framework to help foster financial stability. They came out of that Washington summit with several noteworthy ideas.1 One was to strengthen over-the-counter (OTC) derivatives markets, where defaults had been serious problems during the financial crisis. In particular, G20 leaders agreed to move more of this business onto regulated exchanges and central counterparties (CCPs) as a way to increase transparency and reduce systemic risk

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  • Nahiomy Alvarez, 2019. "Can Broader Access to Direct CCP Clearing Reduce the Concentration of Cleared Derivatives?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 43(3), pages 1-27.
    • Handle: RePEc:fip:fedhep:87551
    DOI: 10.21033/ep-2019-3
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    References listed on IDEAS

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    1. James T. Moser, 1994. "Origins of the modern exchange clearinghouse: a history of early clearing and settlement methods at futures exchanges," Working Paper Series, Issues in Financial Regulation 94-3, Federal Reserve Bank of Chicago.
    2. Douglas D. Evanoff & Daniela Russo & Robert Steigerwald, 2006. "Policymakers, researchers, and practitioners discuss the role of central counterparties," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 30(Q IV), pages 2-21.
    3. John McPartland, 2005. "Clearing and settlement demystified," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Jan.
    4. Alexandre Lazarow, 2011. "Lessons from International Central Counterparties: Benchmarking and Analysis," Discussion Papers 11-4, Bank of Canada.
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