The impact of CCPs to the OTC derivatives industry – CloudMargin
The adoption of CCPs in the OTC derivatives world creates a number of factors to consider for derivatives users, says platform CloudMargin’s latest research.
The white paper from CloudMargin discussed the challenges faced and how they can be turned to the swap participant’s advantage if they start to think like a CCP.
“Thinking like a CCP is the way to get ahead in the new cleared OTC world, a conclusion found in the latest white paper from collateral management cloud technology provider CloudMargin,” the paper reads.
Derivatives users are facing unprecedented levels of change with regulation driven central clearing taking effect today. The white paper discusses the factors derivatives end-users should consider in the new OTC derivatives landscape and how they can turn them to their own advantage.
“With regards to Initial Margin, a miscalibrated value can overstate the risk and require excess capital unnecessarily,” the report continues. “Most firms want to validate CCP calculations, but lack the automation and technology of a platform like CloudMargin to do so.”
“The report discusses how collateral agility is vital and the role technology plays,” comments Andy Davies, co-founder and CEO of CloudMargin. “Having a clear collateral view makes operating an appropriate risk management strategy tangible.”
The report is downloadable from CloudMargin’s website here.