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Author Aitken, James
Title Counterparty Risk, Impact on Collateral Flows and Role for Central Counterparties
Imprint Washington : International Monetary Fund, 2009
©2009
book jacket
Descript 1 online resource (17 pages)
text txt rdacontent
computer c rdamedia
online resource cr rdacarrier
Series IMF Working Papers
IMF Working Papers
Note Intro -- Contents -- I. Introduction -- II. Counterparty Risk -- III. The Changing Profile of Counterparty Risk in the United States -- IV. The Adverse Impact of Counterparty Risk on Global Liquidity -- V. Regulatory Thrust for a Central Counterparty -- VI. Conclusions and Policy Implications -- References -- Tables -- 1. Snapshot of Reduced Collateral Posting Among LCFIs -- 2. Securities Lending by Major Custodians -- 3. Cash Holding by Major LCFIs -- Figures -- 1. Illustrative Repricing of Derivatives When a Large Financial Institution Fails -- 2. Counterparty Liabilities of Major U.S. Banks -- Appendixes -- 1. Methodological Issues in Computing Connectedness in Counterparty Risk
Counterparty risk in the United States stemming from exposures to OTC derivatives payables (after netting) is now concentrated in five banks?Goldman Sachs, JPMorgan, Bank of America, Morgan Stanley and Citi. This note analyzes how such risks have shifted over the past year. We estimate that the adverse impact of counterparty risk on high-grade collateral flows and global liquidity due to decrease in rehypothecation, reduced securities lending, and hoarding of cash by major banks is at least 5 trillion. In order to mitigate counterparty risk, there have been regulatory initiatives to establish central counterparties (CCPs). From a policy perspective, counterparty risk remains large at present and recent experience has shown that OTC derivative positions are not supported by sufficient capital, constituting a major risk for participants in this market
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Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2020. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries
Link Print version: Aitken, James Counterparty Risk, Impact on Collateral Flows and Role for Central Counterparties Washington : International Monetary Fund,c2009 9781451873207
Subject Credit -- Risk assessment.;Risk management -- United States.;Banks and banking -- United States.;Finance -- United States
Electronic books
Alt Author Singh, Manmohan
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