On counterparty risk

Andrew Haldane

Journal of Risk Management in Financial Institutions, 2012, vol. 5, issue 3, 224-226

Abstract: The financial crisis demonstrated the inadequacy of the management of counterparty credit risk and the vulnerability of financial structures to counterparty concerns. Three possible solutions are proposed to mitigate such risks in the future: improved network visibility to understand credit chains; the clearing of transactions centrally to improve transparency and reduce intra-financial system debt; and building protection against counterparty default through higher capital and margining requirements.

Keywords: counterparty risk; contagion; financial crises; systemic risk; interbank markets (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2012:v:5:i:3:p:224-226

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