What Is the Impact of Mandatory Clearing Rules on the OTC Derivatives Market? ▴ Learn

What Is the Impact of Mandatory Clearing Rules on the OTC Derivatives Market?

Mandatory clearing rules, introduced after the 2008 financial crisis, require standardized OTC derivatives to be cleared through a CCP. This has reduced systemic risk by centralizing counterparty exposure, standardizing margin, and increasing transparency.

It has also led to a shift of activity from the bilateral OTC market to the cleared market.

Explain the Difference between Bilateral and Centrally Cleared Derivatives

Are All Over-the-Counter (OTC) Derivatives Subject to Mandatory Clearing and Novation?

What Is the Difference between a Cleared and an Over-the-Counter (OTC) Derivative?

What Are the Risks of Using Bilateral (Non-Cleared) Derivatives Compared to Centrally Cleared Ones?