CCPs and network stability in OTC derivatives markets

Among the reforms to OTC derivative markets since the global financial crisis is a commitment to collateralize counterparty exposures and to clear standardized contracts via central counterparties (CCPs). The reforms aim to reduce interconnectedness and improve counterparty risk management in these important markets. At the same time, however, the reforms necessarily concentrate risk in one or a few nodes in the financial network and also increase institutions’ demand for high-quality assets to meet collateral requirements. This paper looks more closely at the implications of increased CCP clearing for both the topology and stability of the financial network. Building on Heath et al. (2013) and Markose (2012), the analysis supports the view that the concentration of risk in CCPs could generate instability if not appropriately managed. Nevertheless, maintaining CCP prefunded financial resources in accordance with international standards and dispersing any unfunded losses widely through the system can limit the potential for a CCP to transmit stress even in very extreme market conditions. The analysis uses the Bank for International Settlements Macroeconomic Assessment Group on Derivatives (MAGD) data set on the derivatives positions of the 41 largest bank participants in global OTC derivative markets in 2012

Financial transparency, corporate governance and information disclosure of the entrepreneur’s corporation in Rastin banking

This paper aims to define a set of operating regulations for financial transparency, corporate governance and information disclosure for the entrepreneur that applies to bank to receive financial resources. Corporate governance, financial transparency and information disclosure are among the most important solutions to attract public trust to financial operations. To reach this goal, a new set of regulations must be designed to solve the problem. In this regard, Rastin Banking regulations can provide a base to obtain a better circulation of information and a higher clarity. A draft of regulations for financial transparency, corporate governance and information disclosure was compiled, and it is presented here briefly in this paper, which can be used as a basis for codification of the respective law