Why Collateral & CCPs can be bad for your wealth

Bart Piron, Adaptiv on April 10, 2012
Tags: credit, risk, regulation, counterparty risk, collateral management, OTC, CCP

A rich variety of techniques have been developed over the years to reduce counterparty exposures in the OTC markets. The latest one is the use of Central Counterparties (CCPs). Most of these techniques perform as intended most of the time – but can you anticipate when they’ll actually increase exposure?