Reformed derivatives landscape means CCPs have to look at risk in a new way
By Georges Bory, managing director and co-founder,
Central counterparties (CCPs) operate in a highly-regulated
market – one that is undergoing significant change,
part in thanks to a wave of post-crash regulation. In
particular, the Dodd-Frank Act and the move to a centrally
cleared model for over-the-counter derivatives is having a huge
impact. In many ways it represents a double-edged sword for
CCPs: on one hand it provides them with a fantastic opportunity
to expand their businesses, yet on the other it has
significantly increased the complexity of risk management
within their organisations.
The reformed derivatives landscape means that CCPs now have to
start looking at risk in an entirely new way. They need to
manage the risk associated with far more portfolios, at a far
more granular level. They also need to start looking at risk
collectively, across all of their asset classes. All of these
changes have meant that a move to real-time analysis is now
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