Practical guidance toward handling the latest changes to the OTC
derivatives market
Central Counterparties is a practical guide to central
clearing and bilateral margin requirements, from one of the
industry's most influential credit practitioners. With up-to-date
information on the latest regulations imposed after the global
financial crisis, this book covers the mechanics of the clearing
process and analyses the resulting consequences. Detailed
discussion explains the ways in which the very significant clearing
and margining rules will affect the OTC derivatives market and the
financial markets in general, with practical guidance toward
implementation and how to handle the potential consequences.
Over-the-counter derivatives were blamed by many for playing a
major role in the 2007 financial crisis, resulting in a significant
attention and dramatic action by policymakers, politicians, and
regulators to reduce counterparty credit risk which was seen as a
major issue in the crisis. The two most important regulatory
changes are the mandatory clearing of standardised OTC derivatives,
and the requirements for bilateral margin posting in non-standard
OTC contracts. Central Counterparties is a complete
reference guide to navigating these changes, providing
clarification and practical advice.
* Review the mitigation of counterparty credit risk with the
historical development of central clearing
* Clarify the latest regulatory requirements imposed by
Dodd-Frank, EMIR, Basel III and more
* Learn the mechanics of central clearing, with special attention
to complex issues such as margin calculations, the loss waterfall,
client clearing and regulatory capital rules
* Gain insight into the advantages and disadvantages of clearing
and bilateral margin requirements, and the potential issues that
arise
As the clearing and margining mandates are phased in, the
associated costs will be severe enough to dramatically shift the
topology of the financial markets and transform the nature of risk.
Central Counterparties provides the information,
clarification and expert insight market practitioners need to get
up to speed quickly.
