A view on CCPs from the Australian Reserve Bank
Malcolm Edey, Assistant Governor (Financial System), Reserve Bank of Oz.
– Clearing reduces systemic risk (of course this isn’t nearly as simple as it sounds)
– Clearing is complex (totally agree)
– Clearing might be important to Australia, but our AUD IRS market is small
What countries like Oz are finding, is that creating a CCP for OTC products is fiercely complicated and expensive, and for each regional CCP, reduces netting benefits and increases systemic complexity.