Why Are Highly Customized OTC Derivatives Still Not Centrally Cleared?

Highly customized derivatives are difficult to centrally clear because their unique, non-standard terms (e.g. specific underlying assets, non-standard dates) make it impossible for a CCP to find offsetting trades or create a standardized risk model. The lack of fungibility prevents the CCP from effectively mutualizing the risk.

Customization inherently resists standardization.