Clearing Member Eligibility
•Swap Portfolio minimum size of USD1 trillion
•Minimum capital USD5 billion in Clearing Entity or in Parent providing Guarantee
•Credit Rating single A or better
•Margin multipliers applied if existing member downgraded below A
•Compulsory participation in Default Management Process
Tag Archive for Derivatives
Federal Reserve
Financial Turmoil: The Federal Reserve’s Grand Tour
Suspects in the subprime crisis
•Technological innovation in the delivery of credit
•Modeling approaches allowed lenders to more finely differentiate and pool riskier borrowers…borrowers who had trouble getting credit in the past
•Did lenders overshoot?
•High CLTV means thin equity for homeowners.
•Doesn’t take much of a decline in prices to put homeowners “under water”
•Lenders might have underestimated the probability of a broad housing shock