Independent CCP Risk Assessments | A Partnership with Thomas Murray
The Thomas Murray CCP Risk Assessment looks to determine the extent to which the CCP manages your risk burden. Each assessment brings transparency to the industry for the benefit of users, and offers cost savings to regulated firms that are required to perform due diligence and risk assessments on CCPs.
The OTC Space is proud to announce a partnership with Thomas Murray Data Services, bringing to OTC Space readers their highly regarded CCP Risk Assessments. By making an enquiry via the form below (or direct email to The OTC Space) you are supporting the OTC Space if you sign up to a package of CCP Risk Assessments. Read on for more information and look for the enquiry form at the bottom.
CCPs become the buyer to every seller and the seller to every buyer. This requires the CCP to step into all eligible contracts, not just selected contracts. This process makes CCPs risk- concentration vehicles so that an assessment of their risk management techniques is of paramount importance. In such a situation, transparency is critical, as is the ability to compare one CCP against another where there is user choice. CCPs are often multi-jurisdictional. Their use for some products is mandatory, while for others it is optional. Ownership of CCPs varies, and this can lead to conflicting and diverse stakeholder interests. An independent assessment of CCP risk is therefore critical to the users of these entities.
Thomas Murrary have developed an independent CCP risk assessment, and some touch points that have triggered interest in subscribing to the service include:
- A level review of the field, with truly independent external assessment, using a single model across all CCPs.
- A better, deeper understanding of the risk models used, the availability of margin offsets and a common industry standard for classifying the risks globally.
- Transparency on risk that will allow users to choose counterparties on a basis other than price alone.
- Up-to-date analysis of interoperability and any risk issues resulting.
- The collateral crunch has highlighted how CCPs optimise collateral and how its treatment is increasingly important. An ability to compare CCPs is extremely useful.
- The enormous funds being funnelled into CCPs will put their treasury operations under the spotlight. An objective assessment of the credit risk is required.
- The liquidity management tools that CCPs will rely on in a crisis – credit lines, repos, central bank support etc. – are critical to understand.
- Full-time equivalency savings – reducing the cost of regulation by wholesaling the solution rather than duplicating it within each regulated group.
- Expanded coverage at a low cost. Client requests for CCP services in markets not currently covered would require expensive due diligence.