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Former LCH risk chief says sharing loss data would help CCPs avoid risk of holding too little capital, or too much

The regulator wants to introduce a default pension investment option for non-advised savers outside of workplace schemes to boost retirement savings.

Own funds to handle a participant collapse amounted to $313 million

Risk.net Only five of the 10 top central counterparties (CCPs) assessed by  Risk Quantum invest cash received from their clearing members into securities. Of these, three downsized their portfolios over the 12 months to end-September. LCH Ltd, LCH SA, Ice Clear Europe, Ice Clear US and the futures and options unit of CME all disclosed that some amount of cash received as initial margin or default fund contribution from their members was invested as of Q3. LCH Ltd had the largest share of received cash Only users who have a paid subscription or are part of a corporate subscription are able t...

Risk.net Print this page   At most leading central counterparties (CCPs), the amount of own capital they put on the line to cover losses in the event of a clearing members’ default is vanishingly small relative to that contributed by participants. On average, CCP own funds made up a little less than 4% of prefunded default fund resources as of Q3.  Risk Quantum assessed data disclosed for 23 default funds across 10 top CCPs. The Fixed Income Clearing Corporation (FICC) had the lowest amount of skin in the game (SITG) as Only users who have a paid subscription or are part of a...