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Trade exposures with CCPs - CRR Provision: Difference between revisions
Trade exposures with CCPs - CRR Provision (view source)
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*The BIS does talk about this a little: “The treatment in paragraph 192 to 194 may also apply to exposures of lower level clients to higher level clients in a multi-level client structure, provided that for all client levels in-between the conditions in (a) and (b) below are met.” The conditions (see [[Capital requirements for bank exposures to central counterparties|here]] for their text) are predicated on all the structures being of an agency kind. | *The BIS does talk about this a little: “The treatment in paragraph 192 to 194 may also apply to exposures of lower level clients to higher level clients in a multi-level client structure, provided that for all client levels in-between the conditions in (a) and (b) below are met.” The conditions (see [[Capital requirements for bank exposures to central counterparties|here]] for their text) are predicated on all the structures being of an agency kind. | ||
*One is therefore obliged to extrapolate from an agency model to the economic equivalent under a principal model. | *One is therefore obliged to extrapolate from an agency model to the economic equivalent under a principal model. | ||
===What about non-performance by a ''solvent'' [[intermediate broker]]?=== | |||
===The [[clearing member]]’s own [[negligence, fraud or wilful default]]=== | ===The [[clearing member]]’s own [[negligence, fraud or wilful default]]=== | ||
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Looking at it another way, if such a [[carve-out]] did invalidate {{crrprov|306(1)(c)}} then the provision would have no application at all, because it would be commercially impossible to remove it. | Looking at it another way, if such a [[carve-out]] did invalidate {{crrprov|306(1)(c)}} then the provision would have no application at all, because it would be commercially impossible to remove it. | ||
{{ | {{sa}} | ||
*The [[Basel]] / [[BIS]] paper on which this turbulent regulation was based: [[Capital requirements for bank exposures to central counterparties]] | *The [[Basel]] / [[BIS]] paper on which this turbulent regulation was based: [[Capital requirements for bank exposures to central counterparties]] | ||
*[[Agency]] versus [[prini | *[[Agency]] versus [[prini | ||
{{ref}} | {{ref}} | ||