How Did the Role of CCPs Change after the 2008 Financial Crisis?

After the 2008 financial crisis, which was exacerbated by the collapse of Lehman Brothers and the opaque nature of the over-the-counter (OTC) derivatives market, regulators mandated the clearing of standardized OTC derivatives through Central Clearing Counterparties (CCPs). The goal was to increase transparency, reduce systemic risk, and prevent the domino effect of counterparty defaults.

Regulations like the Dodd-Frank Act in the US required a significant portion of the swaps market, previously traded bilaterally, to be centrally cleared, thus dramatically increasing the importance and scale of CCPs in the global financial system.