This article summarizes a conference, titled Issues Related to Central Counterparty Clearing, cosponsored by the Federal Reserve Bank of Chicago and the European Central Bank on April 3-4, 2006. The conference brought together industry executives, policymakers, and research economists to...

Most exchange-traded and some over-the-counter (OTC) derivatives are cleared and settled through clearinghouses that function as central counterparties (CCPs). Most OTC derivatives are settled bilaterally. This article discusses how these alternative mechanisms affect the functioning of...