This paper discusses the challenges faced by a policy treatment of speculative trading motivated by differences in beliefs.

This paper argues that failure resolution cannot yet be safely applied to certain firms that operate key financial market infrastructures used for clearing over-the-counter derivatives or tri-party repurchase agreements.

We use an extensive data set of bilateral exposures on credit default swap (CDS) to estimate the impact on collateral demand of new margin and clearing practices and regulations. We decompose collateral demand for both customers and dealers into several key components, including the "velocity...