The Aftermath of Mandatory Central Clearing

Central clearing is transforming the OTC derivatives market and its risks. It will have an impact on end users, dealers, execution venues, and products. Some of the consequences of change are unequivocally good; some bad; and many mixed. Moreover, it is often not the fact that trades must be cleared that is important, but rather detailed design choices in how CCPs, supervisors and clearing members implement clearing that are determinative. We will review some of the impacts in this chapter, and look at their consequences for the post-mandatory clearing OTC derivatives market. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.