30 years: Capital markets & investment banking
Central Counterparties, or CCPs, reduce settlement and credit risk and costs by netting transactions between multiple counterparties. Peter explains how and why CCPs perform this function.
Central Counterparties, or CCPs, reduce settlement and credit risk and costs by netting transactions between multiple counterparties. Peter explains how and why CCPs perform this function.
Finance Unlocked is the video learning platform built for finance professionals.
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
1 min 53 secs
Central Counterparties (CCPs) are an essential entity for derivative trades in certain markets. They are successful in reducing risk, but can constitute a systemic risk under extreme conditions.
Key learning objectives:
Define CCPs and novation
Understand the significance of CCPs in the derivatives market
Outline examples of major CCPs
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
Following the Global Financial Crisis, the G20 leaders formulated their ambition at the 2009 Pittsburgh summit that all standardised derivatives contracts should be cleared through CCPs because:
Examples of CCPs are:
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
16:09