. Moreover, although they mitigate credit risk, CCPs create liquidity risks, because they rely on participants to provide cash …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 …

This paper investigates increased liquidity provision by market makers resulting from their ability to reduce balance … sheet encumbrance through the use of central counterparties (CCPs). The introduction of the Basel III leverage rule …-by-trade data from sovereign bond markets, we show that liquidity provision by CCP members decreased to a lesser extent following …

Recent regulation mandating the clearing of credit default swaps (CDS) by a Central Clearing Counterparties (CCP), has … its positions. The theoretical model examines variation margin exchange between dealer banks and the price impact of … well as, regulatory implications for a Lender of Last Resort in various liquidity scenarios …

clearinghouse that acts as a seller to every buyer and a buyer to every seller. Proponents of central clearing argue that this … benefits of central clearing are manifest, the downsides are less obvious; clearinghouses concentrate risk and pose enormous … access to central bank credit is crucial, particularly when central clearing of volatile CDSs is required …