Collateral, Netting and Systemic Risk in the OTC Derivatives Market

Collateral, Netting and Systemic Risk in the OTC Derivatives Market
Author :
Publisher : International Monetary Fund
Total Pages : 17
Release :
ISBN-10 : 9781451982763
ISBN-13 : 1451982763
Rating : 4/5 (63 Downloads)

Book Synopsis Collateral, Netting and Systemic Risk in the OTC Derivatives Market by : Mr.Manmohan Singh

Download or read book Collateral, Netting and Systemic Risk in the OTC Derivatives Market written by Mr.Manmohan Singh and published by International Monetary Fund. This book was released on 2010-04-01 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: To mitigate systemic risk, some regulators have advocated the greater use of centralized counterparties (CCPs) to clear Over-The-Counter (OTC) derivatives trades. Regulators should be cognizant that large banks active in the OTC derivatives market do not hold collateral against all the positions in their trading book and the paper proves an estimate of this under-collateralization. Whatever collateral is held by banks is allowed to be rehypothecated (or re-used) to others. Since CCPs would require all positions to have collateral against them, off-loading a significant portion of OTC derivatives transactions to central counterparties (CCPs) would require large increases in posted collateral, possibly requiring large banks to raise more capital. These costs suggest that most large banks will be reluctant to offload their positions to CCPs, and the paper proposes an appropriate capital levy on remaining positions to encourage the transition.


Collateral, Netting and Systemic Risk in the OTC Derivatives Market Related Books

Collateral, Netting and Systemic Risk in the OTC Derivatives Market
Language: en
Pages: 17
Authors: Mr.Manmohan Singh
Categories: Business & Economics
Type: BOOK - Published: 2010-04-01 - Publisher: International Monetary Fund

DOWNLOAD EBOOK

To mitigate systemic risk, some regulators have advocated the greater use of centralized counterparties (CCPs) to clear Over-The-Counter (OTC) derivatives trade
Managing Climate Risk in the U.S. Financial System
Language: en
Pages: 196
Authors: Leonardo Martinez-Diaz
Categories: Science
Type: BOOK - Published: 2020-09-09 - Publisher: U.S. Commodity Futures Trading Commission

DOWNLOAD EBOOK

This publication serves as a roadmap for exploring and managing climate risk in the U.S. financial system. It is the first major climate publication by a U.S. f
OTC Derivatives: Bilateral Trading and Central Clearing
Language: en
Pages: 304
Authors: David Murphy
Categories: Business & Economics
Type: BOOK - Published: 2013-09-04 - Publisher: Palgrave Macmillan

DOWNLOAD EBOOK

The OTC derivatives market has been hit by a massive wave of regulatory change. Capital and margin requirements have increased, trade reporting has been mandate
Discriminatory Pricing of Over-the-Counter Derivatives
Language: en
Pages: 45
Authors: Hau Harald
Categories: Business & Economics
Type: BOOK - Published: 2019-05-07 - Publisher: International Monetary Fund

DOWNLOAD EBOOK

New regulatory data reveal extensive price discrimination against non-financial clients in the FX derivatives market. The client at the 90th percentile pays an
Systemic Risk in the Financial Sector
Language: en
Pages: 0
Authors: Douglas W. Arner
Categories: Economic policy
Type: BOOK - Published: 2019 - Publisher: Cigi Press

DOWNLOAD EBOOK

The 2008 global financial crisis brought the world's economy closer to collapse than ever before. Has enough been done to prevent another crisis?