Derivatives market central counterparties play an important role in exchange traded and some OTC derivatives markets. They exist side by side with bilaterally-cleared derivatives. These two clearing structures share common conceptual elements—netting, credit risk mitigation—though they...

Many jurisdictions identify margin procyclicality at central counterparties (CCPs) as a potential threat to financial stability. This paper studies the effect of less procyclical margin models on cleared volumes and risk taking in a stylized CCP. It finds that less procyclical margins do not...

How do crises affect Central clearing Counterparties (CCPs)? We focus on CCPs that clear and guarantee a large and safe segment of the repo market during the Eurozone sovereign debt crisis. We start by developing a simple framework to infer CCP stress, which can be measured through the...

We perform a network analysis of the centrally cleared interest rate derivatives market in the European Union, by looking at counterparty relations within both direct (house) clearing and client clearing. Since the majority of the gross notional is transferred within central counterparties and...

Market disruptions in response to the COVID pandemic spurred calls for the consideration of marketwide central clearing of Treasury securities, which might better enable dealers to intermediate large customer trading flows. We assess the netting efficiencies of increased central clearing using...

Central clearing counterparties (CCPs) have a variety of economic rationales. The Great Recession of 2007-2009 led regulators to mandate CCPs for most interest-rate and credit derivatives, markets in which large amounts of risks are transferred across agents. This change led to a large increase...

This article analyses the current clearing and settlement infrastructure for transferring shares in Australia. It analyses the legal and regulatory regime in Australia and identifies areas of legal uncertainty. Furthermore, it sets the scene for Part II of this article, which analyses the...

Part I of this article analyzed the legal and regulatory issues that exist in Australia’s current clearing and settlement infrastructure for shares. Part II of this article looks to the future and analyses the new system (‘CHESS 2.0’) that the Australian Stock Exchange (ASX) proposes to...

Providing bank notes is one of the Bank of Canada’s core functions. The Bank is therefore interested in whether cash is adequately distributed across society, and this also influences the Bank’s thinking on issuing a central bank digital currency. We provide a perspective on these issues by...