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Central Counterparties

Author : Jon Gregory
Publisher : John Wiley & Sons
ISBN 13 : 1118891570
Total Pages : 329 pages
Book Rating : 4.1/5 (188 download)

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Book Synopsis Central Counterparties by : Jon Gregory

Download or read book Central Counterparties written by Jon Gregory and published by John Wiley & Sons. This book was released on 2014-06-17 with total page 329 pages. Available in PDF, EPUB and Kindle. Book excerpt: Practical guidance toward handling the latest changes to the OTC derivatives market Central Counterparties is a practical guide to central clearing and bilateral margin requirements, from one of the industry's most influential credit practitioners. With up-to-date information on the latest regulations imposed after the global financial crisis, this book covers the mechanics of the clearing process and analyses the resulting consequences. Detailed discussion explains the ways in which the very significant clearing and margining rules will affect the OTC derivatives market and the financial markets in general, with practical guidance toward implementation and how to handle the potential consequences. Over-the-counter derivatives were blamed by many for playing a major role in the 2007 financial crisis, resulting in a significant attention and dramatic action by policymakers, politicians, and regulators to reduce counterparty credit risk which was seen as a major issue in the crisis. The two most important regulatory changes are the mandatory clearing of standardised OTC derivatives, and the requirements for bilateral margin posting in non-standard OTC contracts. Central Counterparties is a complete reference guide to navigating these changes, providing clarification and practical advice. Review the mitigation of counterparty credit risk with the historical development of central clearing Clarify the latest regulatory requirements imposed by Dodd-Frank, EMIR, Basel III and more Learn the mechanics of central clearing, with special attention to complex issues such as margin calculations, the loss waterfall, client clearing and regulatory capital rules Gain insight into the advantages and disadvantages of clearing and bilateral margin requirements, and the potential issues that arise As the clearing and margining mandates are phased in, the associated costs will be severe enough to dramatically shift the topology of the financial markets and transform the nature of risk. Central Counterparties provides the information, clarification and expert insight market practitioners need to get up to speed quickly.

OTC Derivatives: Bilateral Trading and Central Clearing

Author : David Murphy
Publisher : Palgrave Macmillan
ISBN 13 : 9781137293855
Total Pages : 304 pages
Book Rating : 4.2/5 (938 download)

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Book Synopsis OTC Derivatives: Bilateral Trading and Central Clearing by : David Murphy

Download or read book OTC Derivatives: Bilateral Trading and Central Clearing written by David Murphy and published by Palgrave Macmillan. This book was released on 2013-09-04 with total page 304 pages. Available in PDF, EPUB and Kindle. Book excerpt: The OTC derivatives market has been hit by a massive wave of regulatory change. Capital and margin requirements have increased, trade reporting has been mandated, and execution mechanisms are evolving. Most of all, central clearing is being imposed for many transactions. OTC Derivatives: Bilateral Trading and Central Clearing explains the new rules and the new models. It discusses the traditional bilateral market, then sets out how this will change due to mandatory central clearing and the new ways in which OTC derivatives will have to be traded, reported, and processed. The risks of OTC derivatives clearing houses are discussed in detail, as are the protections that CCPs have against these risks. The book also looks at alternatives to some of the policy decisions that have been made, showing the balance between costs and benefits of various different approaches to derivatives market stability. The book is both a detailed primer on OTC derivatives clearing and a powerful insight into post-crisis financial regulation. Key features of the book include: • A discussion of the capital rules for OTC derivatives counterparty credit risk in Basel III; • An account of OTC derivatives trade processing in both bilateral and cleared markets; • A detailed account of the risk profile of OTC derivatives CCPs; • An explanation of the risks run in various collateral segregation models; and • A comparison of various macro-prudential tools for enhancing the financial stability of OTC derivatives markets.

Collateral, Netting and Systemic Risk in the OTC Derivatives Market

Author : Mr.Manmohan Singh
Publisher : International Monetary Fund
ISBN 13 : 1451982763
Total Pages : 17 pages
Book Rating : 4.4/5 (519 download)

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Book Synopsis Collateral, Netting and Systemic Risk in the OTC Derivatives Market by : Mr.Manmohan Singh

Download or read book Collateral, Netting and Systemic Risk in the OTC Derivatives Market written by Mr.Manmohan Singh and published by International Monetary Fund. This book was released on 2010-04-01 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: To mitigate systemic risk, some regulators have advocated the greater use of centralized counterparties (CCPs) to clear Over-The-Counter (OTC) derivatives trades. Regulators should be cognizant that large banks active in the OTC derivatives market do not hold collateral against all the positions in their trading book and the paper proves an estimate of this under-collateralization. Whatever collateral is held by banks is allowed to be rehypothecated (or re-used) to others. Since CCPs would require all positions to have collateral against them, off-loading a significant portion of OTC derivatives transactions to central counterparties (CCPs) would require large increases in posted collateral, possibly requiring large banks to raise more capital. These costs suggest that most large banks will be reluctant to offload their positions to CCPs, and the paper proposes an appropriate capital levy on remaining positions to encourage the transition.

Central Counterparties Resolution—An Unresolved Problem

Author : Mr.Manmohan Singh
Publisher : International Monetary Fund
ISBN 13 : 1484347307
Total Pages : 23 pages
Book Rating : 4.4/5 (843 download)

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Book Synopsis Central Counterparties Resolution—An Unresolved Problem by : Mr.Manmohan Singh

Download or read book Central Counterparties Resolution—An Unresolved Problem written by Mr.Manmohan Singh and published by International Monetary Fund. This book was released on 2018-03-20 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recovery and resolution regimes are being developed for central counterparties (CCPs). We analyse current resolution tools in the context of policy, which is to restore the critical functions of a failed CCP. We conclude that the toolkit is insufficient to avoid the costs of resolution being borne by taxpayers, and propose alternative policy suggestions for addressing the problem of a failed CCP.

Discriminatory Pricing of Over-the-Counter Derivatives

Author : Hau Harald
Publisher : International Monetary Fund
ISBN 13 : 1498303773
Total Pages : 45 pages
Book Rating : 4.4/5 (983 download)

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Book Synopsis Discriminatory Pricing of Over-the-Counter Derivatives by : Hau Harald

Download or read book Discriminatory Pricing of Over-the-Counter Derivatives written by Hau Harald and published by International Monetary Fund. This book was released on 2019-05-07 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: New regulatory data reveal extensive price discrimination against non-financial clients in the FX derivatives market. The client at the 90th percentile pays an effective spread of 0.5%, while the bottom quarter incur transaction costs of less than 0.02%. Consistent with models of search frictions in over-the-counter markets, dealers charge higher spreads to less sophisticated clients. However, price discrimination is eliminated when clients trade through multi-dealer request-for-quote platforms. We also document that dealers extract rents from captive clients and market opacity, but only for contracts negotiated bilaterally with unsophisticated clients.

New Developments in Clearing and Settlement Arrangements for OTC Derivatives

Author :
Publisher :
ISBN 13 :
Total Pages : 76 pages
Book Rating : 4.3/5 ( download)

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Book Synopsis New Developments in Clearing and Settlement Arrangements for OTC Derivatives by :

Download or read book New Developments in Clearing and Settlement Arrangements for OTC Derivatives written by and published by . This book was released on 2007 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt:

International Convergence of Capital Measurement and Capital Standards

Author :
Publisher : Lulu.com
ISBN 13 : 9291316695
Total Pages : 294 pages
Book Rating : 4.2/5 (913 download)

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Book Synopsis International Convergence of Capital Measurement and Capital Standards by :

Download or read book International Convergence of Capital Measurement and Capital Standards written by and published by Lulu.com. This book was released on 2004 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt:

When Genius Failed

Author : Roger Lowenstein
Publisher : Random House Trade Paperbacks
ISBN 13 : 0375758259
Total Pages : 290 pages
Book Rating : 4.3/5 (757 download)

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Book Synopsis When Genius Failed by : Roger Lowenstein

Download or read book When Genius Failed written by Roger Lowenstein and published by Random House Trade Paperbacks. This book was released on 2001-10-09 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: “A riveting account that reaches beyond the market landscape to say something universal about risk and triumph, about hubris and failure.”—The New York Times NAMED ONE OF THE BEST BOOKS OF THE YEAR BY BUSINESSWEEK In this business classic—now with a new Afterword in which the author draws parallels to the recent financial crisis—Roger Lowenstein captures the gripping roller-coaster ride of Long-Term Capital Management. Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein explains not just how the fund made and lost its money but also how the personalities of Long-Term’s partners, the arrogance of their mathematical certainties, and the culture of Wall Street itself contributed to both their rise and their fall. When it was founded in 1993, Long-Term was hailed as the most impressive hedge fund in history. But after four years in which the firm dazzled Wall Street as a $100 billion moneymaking juggernaut, it suddenly suffered catastrophic losses that jeopardized not only the biggest banks on Wall Street but the stability of the financial system itself. The dramatic story of Long-Term’s fall is now a chilling harbinger of the crisis that would strike all of Wall Street, from Lehman Brothers to AIG, a decade later. In his new Afterword, Lowenstein shows that LTCM’s implosion should be seen not as a one-off drama but as a template for market meltdowns in an age of instability—and as a wake-up call that Wall Street and government alike tragically ignored. Praise for When Genius Failed “[Roger] Lowenstein has written a squalid and fascinating tale of world-class greed and, above all, hubris.”—BusinessWeek “Compelling . . . The fund was long cloaked in secrecy, making the story of its rise . . . and its ultimate destruction that much more fascinating.”—The Washington Post “Story-telling journalism at its best.”—The Economist

The World Scientific Handbook of Futures Markets

Author : Anastasios G. E. T. Al MALLIARIS
Publisher : World Scientific
ISBN 13 : 9814566926
Total Pages : 844 pages
Book Rating : 4.8/5 (145 download)

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Book Synopsis The World Scientific Handbook of Futures Markets by : Anastasios G. E. T. Al MALLIARIS

Download or read book The World Scientific Handbook of Futures Markets written by Anastasios G. E. T. Al MALLIARIS and published by World Scientific. This book was released on 2015-08-06 with total page 844 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The World Scientific Handbook of Futures Markets serves as a definitive source for comprehensive and accessible information in futures markets. The emphasis is on the unique characteristics of futures markets that make them worthy of a special volume. In our judgment, futures markets are currently undergoing remarkable changes as trading is shifting from open outcry to electronic and as the traditional functions of hedging and speculation are extended to include futures as an alternative investment vehicle in traditional portfolios. The unique feature of this volume is the selection of five classic papers that lay the foundations of the futures markets and the invitation to the leading academics who do work in the area to write critical surveys in a dozen important topics."--$cProvided by publisher.

The Lender of Last Resort

Author :
Publisher : Routledge
ISBN 13 : 1134358938
Total Pages : 527 pages
Book Rating : 4.1/5 (343 download)

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Book Synopsis The Lender of Last Resort by :

Download or read book The Lender of Last Resort written by and published by Routledge. This book was released on with total page 527 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Collateral Management

Author : Michael Simmons
Publisher : John Wiley & Sons
ISBN 13 : 1119377129
Total Pages : 839 pages
Book Rating : 4.1/5 (193 download)

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Book Synopsis Collateral Management by : Michael Simmons

Download or read book Collateral Management written by Michael Simmons and published by John Wiley & Sons. This book was released on 2019-02-18 with total page 839 pages. Available in PDF, EPUB and Kindle. Book excerpt: Insight into collateral management and its increasing relevance in modern banking In the wake of recent financial crises, firms of all sizes have adjusted their policies to incorporate more frequent instances of collateral management. Collateral Management: A Guide to Mitigating Counterparty Risk explains the connection between the need for collateral management in order to alleviate counterparty risk and the actions that firms must take to achieve it. Targeted at middle and back office managers seeking a hands-on explanation of the specifics of collateral management, this book offers a thorough treatment of the subject and attends to details such as internal record management, daily procedures used in making and receiving collateral calls, and settlement-related issues that affect the movements of cash and securities collateral. An expert in financial topics ranging from trade lifecycle to operational risk, author Michael Simmons offers readers insight into a field that, so far, is struggling to produce enough expertise to meet its high demand. Presents hands-on advice and examples from a bestselling, internationally renowned author who introduces his third book on operations and operations-related activities Explains the relationship between collateral management and preventing institutional defaults, such as the recent Lehman Brothers downfall Since 2008, firms have recognized and embraced the importance of collateral management, but this book will provide practitioners with a deeper understanding and appreciation of its relevance.

How Big Banks Fail and What to Do about It

Author : Darrell Duffie
Publisher : Princeton University Press
ISBN 13 : 1400836999
Total Pages : 108 pages
Book Rating : 4.4/5 (8 download)

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Book Synopsis How Big Banks Fail and What to Do about It by : Darrell Duffie

Download or read book How Big Banks Fail and What to Do about It written by Darrell Duffie and published by Princeton University Press. This book was released on 2010-10-18 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: A leading finance expert explains how and why big banks fail—and what can be done to prevent it Dealer banks—that is, large banks that deal in securities and derivatives, such as J. P. Morgan and Goldman Sachs—are of a size and complexity that sharply distinguish them from typical commercial banks. When they fail, as we saw in the global financial crisis, they pose significant risks to our financial system and the world economy. How Big Banks Fail and What to Do about It examines how these banks collapse and how we can prevent the need to bail them out. In sharp, clinical detail, Darrell Duffie walks readers step-by-step through the mechanics of large-bank failures. He identifies where the cracks first appear when a dealer bank is weakened by severe trading losses, and demonstrates how the bank's relationships with its customers and business partners abruptly change when its solvency is threatened. As others seek to reduce their exposure to the dealer bank, the bank is forced to signal its strength by using up its slim stock of remaining liquid capital. Duffie shows how the key mechanisms in a dealer bank's collapse—such as Lehman Brothers' failure in 2008—derive from special institutional frameworks and regulations that influence the flight of short-term secured creditors, hedge-fund clients, derivatives counterparties, and most devastatingly, the loss of clearing and settlement services. How Big Banks Fail and What to Do about It reveals why today's regulatory and institutional frameworks for mitigating large-bank failures don't address the special risks to our financial system that are posed by dealer banks, and outlines the improvements in regulations and market institutions that are needed to address these systemic risks.

The Risk Controllers

Author : Peter Norman
Publisher : John Wiley & Sons
ISBN 13 : 1119977940
Total Pages : 403 pages
Book Rating : 4.1/5 (199 download)

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Book Synopsis The Risk Controllers by : Peter Norman

Download or read book The Risk Controllers written by Peter Norman and published by John Wiley & Sons. This book was released on 2011-09-07 with total page 403 pages. Available in PDF, EPUB and Kindle. Book excerpt: Clearing houses, or CCPs, were among the very few organisations to emerge from the global financial crisis with their standing enhanced. In the chaotic aftermath of the bankruptcy of Lehman Brothers, they successfully completed trades worth trillions of dollars in a multitude of financial instruments across listed and over-the-counter markets, and so helped avert financial Armageddon. That success transformed the business of clearing. Governments and regulators around the world gave CCPs and the clearing services they provide a front-line role in protecting the global economy from future excesses of finance. CCPs, which mitigate risk in financial markets, responded by greatly expanding their activities, notably in markets for over-the-counter derivatives, and often in fierce competition with one another. In The Risk Controllers, journalist and author Peter Norman describes how CCPs operate, how they handled the Lehman default, and the challenges they now face. Because central counterparty clearing is a complex business with a long history that continues to influence decisions and structures even in today’s fast changing world, The Risk Controllers explores the development of CCPs and clearing from the earliest times to the present. It draws on the experiences of the people who helped to shape the business of clearing today. It sets the development of CCPs and clearing in the broader context of changes in society, politics and regulation. The book examines turning points, such as the 1987 stock market crash, that set clearing on a new path and the impact of long running trends, including the exponential growth of computer power and the ebb and flow of globalisation. Written in non-technical language, The Risk Controllers provides a unique and accessible guide to CCPs and clearing. It is essential reading for clearing professionals, legislators and regulators whose job it is to take this vitally important business into the future. “The recent crisis has, thankfully, renewed interest in the importance of central counterparties: how they can help preserve stability or, as Hong Kong showed in 1987, undermine stability if they are not super sound. Peter Norman’s book places the role of clearing houses in a historical context, and explains why the financial system’s plumbing matters so much. It should be read by anyone interested in building safer capital markets.” Paul Tucker, Deputy Governor Financial Stability, Bank of England

Commodity Price Dynamics

Author : Craig Pirrong
Publisher : Cambridge University Press
ISBN 13 : 1139501976
Total Pages : 239 pages
Book Rating : 4.1/5 (395 download)

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Book Synopsis Commodity Price Dynamics by : Craig Pirrong

Download or read book Commodity Price Dynamics written by Craig Pirrong and published by Cambridge University Press. This book was released on 2011-10-31 with total page 239 pages. Available in PDF, EPUB and Kindle. Book excerpt: Commodities have become an important component of many investors' portfolios and the focus of much political controversy over the past decade. This book utilizes structural models to provide a better understanding of how commodities' prices behave and what drives them. It exploits differences across commodities and examines a variety of predictions of the models to identify where they work and where they fail. The findings of the analysis are useful to scholars, traders and policy makers who want to better understand often puzzling - and extreme - movements in the prices of commodities from aluminium to oil to soybeans to zinc.

Clearing, Settlement and Custody

Author : David Loader
Publisher : Elsevier
ISBN 13 : 0080490654
Total Pages : 249 pages
Book Rating : 4.0/5 (84 download)

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Book Synopsis Clearing, Settlement and Custody by : David Loader

Download or read book Clearing, Settlement and Custody written by David Loader and published by Elsevier. This book was released on 2002-09-05 with total page 249 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'Clearing, Settlement and Custody' focuses on the clearing, settlement and custody functions by analyzing how they work and the interaction between the organizations involved. The author examines the roles of clearing houses, central counterparties, central securities depositories and the custodians, as well as, assessing the impact on the workflow and procedures in the operations function at banks, brokers and institutions. The changes that are taking place in the industry are explored and the impact for operations managers and supervisors assessed.Clearing, settlement and custody is at the heart of everything that happens in the financial markets. The evolution of clearing and settlement is one that is still happening and as such, it is impacting on the operations function through both new practices but also, increasingly, in terms of regulation, risk and reputation.In essence the efficient clearing and settlement operation is managing risk, not because it is a direct part of the process but more because it is a bi-product. The routine procedures relate to reconciliation and record keeping. If these are performed efficiently and accurately it will result in accurate records of activity and profit and loss.The settlement process is a key element in identifying and correcting errors made by dealers and traders. Failure to identify the error or act promptly will result in potentially serious financial loss, as well as worrying audit and the regulators.In addition to these concerns the financial service sector is also undergoing a massive rationalization of the structure of clearing and settlement and seeking the twin goals of automation and shortening settlement cycles. The challenge for operations managers is considerable: manage costs, eradicate inefficiencies, create an environment to be competitive, and implement the procedures to meet future changes that will occur. In this book the author looks at some of the different roles, the processes and procedures, and the key issues, in order to help those in operations meet the challenge.The definitive series of professional references for those finance professionals concerned with "Back office" or operations management unique to this industry.Presents concise references on the essential management functions such as technology, client services, and risk management for financial operations management professionals.A comprehensive resource from a leading financial management consultant for global banks and institutions.

The Morning After--The Impact on Collateral Supply After a Major Default

Author : Dermot Turing
Publisher : International Monetary Fund
ISBN 13 : 1484381920
Total Pages : 26 pages
Book Rating : 4.4/5 (843 download)

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Book Synopsis The Morning After--The Impact on Collateral Supply After a Major Default by : Dermot Turing

Download or read book The Morning After--The Impact on Collateral Supply After a Major Default written by Dermot Turing and published by International Monetary Fund. This book was released on 2018-10-31 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Changes to the regulatory system introduced after the financial crisis include not only mandatory clearing of OTC derivatives at central counterparties and margining of uncleared derivatives, but also prudential measures, including notably a “Liquidity Coverage Ratio” which obliges firms to set aside high-quality liquid assets (HQLA) as a stopgap against anticipated cash outflows. We examine factors which may affect the demand for HQLA in a severely stressed market following a hypothetical default of a major clearing member. Immediately following a major default, the amount of HQLA demanded by the whole market would spike. We estimate the size of the spike and draw conclusions as to whether the depth of the market is adequate to absorb it.

Financial Sector Resolution

Author : Great Britain: H.M. Treasury
Publisher : The Stationery Office
ISBN 13 : 9780101841924
Total Pages : 56 pages
Book Rating : 4.8/5 (419 download)

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Book Synopsis Financial Sector Resolution by : Great Britain: H.M. Treasury

Download or read book Financial Sector Resolution written by Great Britain: H.M. Treasury and published by The Stationery Office. This book was released on 2012-08 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 2007-09 financial crisis exposed a great many flaws in the global financial system. To address the problems a wide-ranging programme of banking and wider financial sector reform is underway at European and global level. When it came into office, the Government asked the Independent Commission on Banking to recommend ways to strengthen the resilience of the banking system and promote competition and has published a white paper (Cm. 8356, ISBN 9780101835626) setting out how it would implement those recommendations. Banks, though, are only part of the financial system. Other types of financial institutions can also pose a risk to financial stability, if there is no way for them to fail safely. In this paper, the Government now sets out proposals and questions for consultation on enhancing the mechanisms available for dealing with the failure of systemically important non-banks. It covers four broad groups: investment firms, central counterparties (CCPs); non-CCP financial market infrastructure (non-CCP FMIs); and insurers. However the Government does not preclude the possibility of other types of non-bank - for example, hedge funds, or non-bank finance companies - of being systemically important and welcomes all evidence. This document includes indicative draft legislative clauses for certain key aspects of envisaged resolution regimes