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 (763 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
Making OTC Derivatives Safe—A Fresh Look
Language: en
Pages: 24
Authors: Mr.Manmohan Singh
Categories: Business & Economics
Type: BOOK - Published: 2011-03-01 - Publisher: International Monetary Fund

DOWNLOAD EBOOK

Recent regulatory efforts, especially in the U.S. and Europe, are aimed at reducing moral hazard so that the next financial crisis is not bailed out by tax paye
Post-Trade Processing of OTC Derivatives
Language: en
Pages: 222
Authors: Olga Lewandowska
Categories: Business & Economics
Type: BOOK - Published: 2020-04-30 - Publisher: BoD – Books on Demand

DOWNLOAD EBOOK

The financial crisis of 2007–2009 exposed the weaknesses of the global over-the-counter (OTC) derivatives market such as limited transparency regarding risk e
Recommendations for Central Counterparties
Language: en
Pages: 80
Authors: Group of Ten. Committee on Payment and Settlement Systems
Categories: Clearing of securities
Type: BOOK - Published: 2004 - Publisher:

DOWNLOAD EBOOK

A Practical Guide to Collateral Management in the OTC Derivatives Market
Language: en
Pages: 0
Authors: Lombard Risk Management
Categories: Business & Economics
Type: BOOK - Published: 2003-06-17 - Publisher: Palgrave Macmillan

DOWNLOAD EBOOK

This is the first book of its kind on the market and is aimed at collateral management professionals in the OTC derivatives markets. It is a guide to the key to