Through the lens of market participants' objective to minimize counterparty risk, we investigate central clearing in … derivatives markets, and its interaction with systematic risk, portfolio directionality, and loss sharing. Previous studies … suggest that central clearing always reduces counterparty risk for a sufficiently large number of clearing members. We show …

This paper studies the impact of financial sector size and leverage on business cycles and risk-free rates dynamics. We … model a general equilibrium productive economy where financial intermediaries provide costly risk mitigation to households … intermediaries' relative size, but may also mitigate the business cycle. Moreover, it makes risk-free rates pro-cyclical. Households …

Through the lens of market participants' objective to minimize counterparty risk, we provide an explanation for the … of the benefits and potential pitfalls with respect to a single market participant's counterparty risk exposure when … elements can render central clearing harmful for a market participant's counterparty risk exposure regardless of the number of …

Through the lens of market participants' objective to minimize counterparty risk, we provide an explanation for the … of the benefits and potential pitfalls with respect to a single market participant's counterparty risk exposure when … elements can render central clearing harmful for a market participant's counterparty risk exposure regardless of the number of …

Financial risk management is difficult at the best of times, but especially so in the presence of economic uncertainty … and financial crises. The purpose of this special issue on "Advances in Financial Risk Management and Economic Policy … methods have contributed significantly to the analysis of financial risk management when there is economic uncertainty …

non-banks are often specialised. 3) When using relative net exposures as a proxy for the "flow of risk" in the IRS market …, we find that risk absorption takes place in the core as well as the periphery of the network but in absolute terms the … risk absorption is largely at the core. 4) Among the Basel III capital and liquidity ratios, the leverage ratio plays a key …

non-banks are often specialised. 3) When using relative net exposures as a proxy for the "flow of risk" in the IRS market …, we find that risk absorption takes place in the core as well as the periphery of the network. 4) Among the Basel III …