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demand of new margin and clearing practices and regulations. We decompose collateral demand for both customers and dealers … impact on collateral demand of more widespread initial margin requirements, increased novation of CDS to central clearing …-to-dealer initial margin requirements, however, mandatory central clearing is shown to lower, not raise, system-wide collateral demand …
Persistent link: https://www.econbiz.de/10011605683
Through the lens of market participants' objective to minimize counterparty risk, we provide an explanation for the reluctance to clear derivative trades in the absence of a central clearing obligation. We develop a comprehensive understanding of the benefits and potential pitfalls with respect...
Persistent link: https://www.econbiz.de/10011936020
for CDS sellers is found to be sudden increases in collateral requirements on multiple correlated CDS exposures. Close …
Persistent link: https://www.econbiz.de/10011605644
We perform a network analysis of the centrally cleared interest rate derivatives market in the European Union, by looking at counterparty relations within both direct (house) clearing and client clearing. Since the majority of the gross notional is transferred within central counterparties and...
Persistent link: https://www.econbiz.de/10011984837
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...
Persistent link: https://www.econbiz.de/10012064310
Modern money and capital markets are not free-form bazaars where participants are left alone to contract as they choose, but rather are circumscribed by a variety of statutes, regulations, and behavioral norms. This paper examines the circumstances surrounding the introduction of a set of norms...
Persistent link: https://www.econbiz.de/10011942767
strong relation with return on assets and volume of collected deposits i.e. profit margin per product. …
Persistent link: https://www.econbiz.de/10012217792
market shows a mid-level liquidity. We also find while the exchange margin is set to meet the normal price volatility that … can cover the daily price movements within one standard deviation, the brokerage margin for bitcoin futures is set at … beyond two standard deviations. Some brokerage firms impose non-margin requirements such as high net account balance and open …
Persistent link: https://www.econbiz.de/10014477255
to maintain the trading margin. In effect, efficient Nifty returns would be achieved. Conclusions: This study found that …
Persistent link: https://www.econbiz.de/10011808253
By stepping between bilateral counterparties, a central counterparty (CCP) transforms credit exposure. CCPs generally improve financial stability. Nevertheless, large CCPs are by nature concentrated and interconnected with major global banks. Moreover, although they mitigate credit risk, CCPs...
Persistent link: https://www.econbiz.de/10012429406