Publication
Title
Risk management practices of central counterparties : European vs. third-country CCPs
Author
Abstract
As central counterparties can act as shock absorbers but may also lead to financial stability problems themselves, this paper explores the financial risk management practices of central counterparties around the world. Furthermore, we compare European with third-country CCPs to see whether different risk management practices are being applied. Our results indicate that CCPs in the EU require more money to be deposited at a central bank of issue as initial margins compared to non-EU CCPs. The former also demand a higher fraction of prefunded clearing member contributions. In addition, asset segregation is more common at EU CCPs. In terms of investment risk management, EU CCPs prefer to deposit cash at central banks, while non-EU CCPs tend to have cash deposits at commercial banks. European CCPs have almost three times as many liquid resources as non-EU CCPs.
Language
English
Source (journal)
Journal of insurance and financial management
Publication
2022
Volume/pages
6 :2 (2022) , p. 125-161
Full text (open access)
UAntwerpen
Research group
Publication type
Subject
External links
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Record
Identifier
Creation 16.09.2023
Last edited 08.03.2024
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