An Incentive Theory of Counterparty Risk, Margins, and CCP Design

Florian Heider

Chapter 15 in Achieving Financial Stability:Challenges to Prudential Regulation, 2017, pp 209-224 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Central clearing counterparties (CCPs) play an important role in financial markets. Clearing is the process of settling a trade agreement on the accounts of the transacting parties. A CCP is an agent who interposes herself between all buyers and sellers that agree to use the CCP. Through a process called “novation,” a CCP becomes the buyer to many sellers and the seller to many buyers…

Keywords: Money and Banking; International Banking; Financial Instititions; Banks; Regulations; Compliance; Financial Crisis; Great Financial Crisis 2008; Microprudential; Macroprudential; Financial Stability (search for similar items in EconPapers)
JEL-codes: E50 (search for similar items in EconPapers)
Date: 2017
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