THE END OF CLIENT CLEARING?: BUY-SIDE

摘要

For the past five years or so, regulators across the globe have endeavoured to knock the over-the-counter (OTC) derivatives market into a shape more closely resembling the exchange-based equities market - more standardised, more transparent, and above all, less risky. This has brought about the introduction of central clearing for the vast majority of standardised OTC contracts. Under this plan, the market moves away from the highly fragmented, bilateral relationships that prevailed pre-2008 to a structure where central counterparties (CCPs) scoop up the credit risk and, using the collateral and default fund contributions from their members, make everybody whole again if one participant goes bust.