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DIGITAL WEEK 

4th Edition Impact of CCP risk and Initial Margin on Counterparty Risk Management

29 June - 3 July 2020 / Live Streaming & On-Demand

Why do you identify information transparency and consultation as a top priority for members’ and end-users’ CCP Risk Management?

CCPs are financial markets infrastructure providers, and it is in everyone’s incentive to ensure the safety and robustness of CCPs.  Furthermore, when default of a member happens with insufficient margin to close-out the defaulters’ position, the cost of closing out could be mutualised amongst members and end-users.  Therefore, to facilitate CCP risk management for members and end-users, information and transparency is vital.  Also, any changes CCPs make which affect the nature of risks faced by members and end-users should go through a proper consultation process with the affected parties.

What are the main challenges in managing CCPs’ and related risk exposures?

The three main challenges I’d like to point out are:

• The robustness of the initial margin methodology:  The industry participants have observed that some CCPs initial margins have spiked by factor of 2-3 times in a matter of days during this recent Covid-19 market crisis.  Such pro-cyclicality nature of initial margin can destabilise the financial markets, as members and end-users could suddenly be required to fund the increase. 
• Standardise transparency and level of consultation across all CCPs: If one surveys the level of transparency and level of consultation offered by different CCPs, one finds a vast range of practices. It requires regulatory bodies around the globe to act on standardising, regulating, and promoting best practices. 
• The capability to estimate stress loss for members and end-users due to member default events:  Members and end-users need to articulate risk appetite by  estimating potential stress loss under member default events.  However, information disclosed publically by CCPs currently are not sufficient to model potential these types of stress losses.  CCPs / regulators / industry will need to find a way to facilitate.

What do you expect to gain attending this meeting? 

Given the importance of CCPs as significant financial markets infrastructure providers, risk management of CCPs is an important topic for all market participants. I am keen to share that expertise on CCP risk management with practitioners and other industry stakeholders.

An interview with:

Key-Yong Tee, Head of CCP Risk Management,  EMEA & North America
Barclays

Our Digital Week Format 

We recognise that in today’s worlds our clients need information delivered in a different way; one that recognises that fluid working hours and flexible working environments are the “new normal”. Our DIGITAL WEEK FORMAT is designed to compliment this new way of working by delivering three hours of highly focused, practitioner drive content per day, spread across your working week through our innovative Live+ platform online streaming platform.

With recent real-life examples of client defaults and displays of CCP weaknesses, it is paramount for those involved in the financial markets and clearing services to better understand banks’ exposure to CCP. In order to enable this firms, need greater transparency on CCP methodologies to lead to effective risk modelling and strategic management decisions for direct participants. Furthermore, increasing the resilience within the CCP landscape through higher governance, supervision and coordination is crucial to strengthen the industry. Heads of counterparty credit risk and OTC clearing will find beneficial to reflect on the present industry gaps and weaknesses in terms of default management processes, non-financial losses and concentration risk. On the other side, CCP risk management is also a regulation-driven world. Tightening rules on initial margin reforms and amendments in the benchmark rate require banks to understand the implications of such changes in order to ensure the most effective transition and application.

This marcus evans event will enable firms to gain an insight into how CCP risk and initial margin are impacting counterparty risk, to enable institutes to reflect these changes into their specific business models and hence maintain a competitive advantage in the market.

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We would be delighted to provide you with more information on this event.  Please fill in your details below and we will be in touch.

Based in London, Key-Yong is head of the function responsible for managing Barclays’ credit risk exposures from CCP memberships and activities.  He also chairs the internal Barclays CCP risk governance body, and actively participates in industry advocacy effort on issues regarding CCPs’ risk management.

Before taking up the role in 2018, Key-Yong was the Product Manager for Barclays’ Derivative Clearing Services globally. Before joining Barclays in 2013, Key-Yong held roles in Credit Risk, Market Risk and COO functions for trading desks in Royal Bank of Scotland. 

To view the Digital Week Agenda, click HERE! 

For all enquiries regarding speaking, sponsoring and attending this conference contact:

Yiota Andreou
Email: Yiotaa@marcusevanscy.com
Telephone: +357 22849 404
Fax: +357 22 849 394