This paper studies the risk management of central counterparties (CCPs) using a granular transaction-level dataset. We … test whether margining practices are sufficient relative to portfolio risk and whether CCPs reduce margin requirements in a …

its counterparties: 1) correlation across and within derivative classes (i.e., systematic risk), 2) collateralization of …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 …