// definition
CCP
Central counterparty
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Short definition
A clearing house that interposes itself between buyer and seller and becomes the counterparty to each trade. It reduces counterparty risk and organises default management, at the cost of more systematic margin calls.
risk atlas
Knowledge map
Intuition
A central counterparty reduces the propagation of default, but turns market losses into calls for cash and collateral.
Formula
counterparty protection = initial margin + variation margin + default resourcesWhy it matters now
When oil becomes more volatile, clearing resilience also depends on clients and banks providing liquidity on time.
Related analyses
- When the barrel becomes a margin callHedging, cash, clearing and transmission to bank balance sheets.
Related guides
- Reading the oil marketPrices, curve, inventories, OPEC and physical data.
- Reading interest-rate swapsValuation, clearing and counterparty risk in derivatives.
Related datasets
- risk.jsonPublic snapshot of the risk signals.
- signals/history.jsonPoint-in-time history of the signals.
- risk-diff.json1, 7 and 30-day diff of signals, sources and models.
- evidence-graph.jsonClaims, evidence and their sources as a graph.
Signals using it
- Energy MonitorMethodology of the energy stress signal.
- Risk DiffRecent change in risk and source freshness.
Primary sources
- Intercontinental ExchangeBrent future specifications, clearing and indicative margins.
- European Central BankEnergy derivatives, margin calls, bank credit and EMIR data.
- Bank of EnglandMeasures of the 2022 European energy-margin stress.
- Financial Stability BoardInternational recommendations on margin-call preparedness.