reluctance to clear derivative trades in the absence of a central clearing obligation. We develop a comprehensive understanding … moving from a bilateral to a clearing architecture for derivative markets. Previous studies suggest that central clearing is … derivative claims, and 3) loss sharing among clearing members. Our results have substantial implications for the design of …

are consistent with the reluctance to clear derivative trades in the absence of a clearing obligation. …Through the lens of market participants' objective to minimize counterparty risk, we investigate central clearing in … suggest that central clearing always reduces counterparty risk for a sufficiently large number of clearing members. We show …

reluctance to clear derivative trades in the absence of a central clearing obligation. We develop a comprehensive understanding … moving from a bilateral to a clearing architecture for derivative markets. Previous studies suggest that central clearing is … derivative claims, and 3) loss sharing among clearing members. Our results have substantial implications for the design of …