How Does the CCP's Default Management Process Maintain Market Integrity? ▴ Learn

How Does the CCP’s Default Management Process Maintain Market Integrity?

The CCP's default management process is a pre-defined set of procedures to be executed immediately upon a member's failure. It involves immediately liquidating or hedging the defaulter's portfolio in an orderly manner to minimize market disruption.

By quickly containing the loss and preventing contagion, the process ensures that the non-defaulting members and the broader market can continue to function normally.

In Derivatives, How Does the Use of a Central Clearing Counterparty (CCP) Mitigate Counterparty Risk Similar to How the Blockchain Prevents Double-Spending?

What Is the Role of a Default Fund in a CCP Structure?

What Is the Benefit of Daily Cash Settlement for the Overall Market Stability?

What Is the ‘Default Waterfall’ in CCP Risk Management?