Analysis: Rules will concentrate risk among CCPs

04/4/2012 | Economist (free content), The

Regulators are pushing clearinghouses to become central counterparties for derivatives transactions, prompting increased interest in the clearing sector. The situation likely will result in a few issues, including risk concentration, particularly if CCPs consolidate, according to this blog post. If a CCP faces a crisis, responsibility for rescuing it likely will be questioned. The quality of collateral accepted by CCPs could also become an issue as government bonds no longer have the "risk-free" status they once enjoyed, The Economist's Schumpeter columnist writes.

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Economist (free content), The

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