Walk and talk like a CCP 19 December 2013London Reporter: Georgina Lavers
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Thinking like a CCP is the way to get ahead in the new cleared OTC world, was the conclusion formed from a recent whitepaper.
The whitepaper, from collateral management cloud technology provider CloudMargin, said that the adoption of CCPs in the OTC derivatives world creates a number of factors to consider for derivatives users, given that they are facing unprecedented levels of change with regulation driven central clearing taking effect.
"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."
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