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Banks Must Bear the Risk of Derivatives Losses, CME Paper Says 

January 21, 2015

Matthew Leising, Bloomberg 

CME Group Inc. (CME), the world’s largest derivatives market, wants its bank members to bear responsibility for ensuring there is enough cash on hand in the case of a default.

The debate over how clearing houses are managed and the level of resources available has gone back and forth between the Chicago-based exchange owner and its largest bank members such as JPMorgan Chase & Co. (JPM) CME said in a white paper published today it has set aside the equivalent of 5.25 percent of the money its bank members have put into a collective default fund. In September, JPMorgan said CME’s contribution, referred to as skin in the game, should equal 10 percent.

Read More: Bloomberg 

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