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Online seminar: Central Counterparty Clearing and Systemic Risk

Over the past decade, clearinghouses have subsumed the management of counterparty risk for many financial transactions. On 30 April 2019, the Florence School of Banking and Finance held an online seminar to discuss the features of Central Counterparties (CCPs), their regulatory framework and their features as both insurers and sources of systemic risk.

The lead presenter in this seminar was Thorsten V. Koeppl, Professor and RBC Fellow in the Department of Economics at Queen’s University, and Scholar in Financial Services and Monetary Policy at the CD Howe Institute, one of Canada’s most influential policy think tanks. An expert in the areas of monetary economics, financial market infrastructure and blockchain economics, Professor Koeppl advises the Bank of Canada on Central Bank Digital Currency and in the past has served as an adviser to several other policy institutions in matters of financial market organization, regulation and intervention in the past.

In his presentation, Professor Koeppl outlined the rationale and evolution of CCPs, presenting their principal features and assessing their implications in terms of risk management. In particular, the presentation focused on some of the challenges for the management of the activities of CCPs, namely margin policies, resolution, Brexit, capital and financial innovations.

The main presentation was followed by a commentary by Agnieszka Smoleńska, acting head of the European Affairs desk at Polityka Insight and PhD researcher in Law at the European University Institute and research associate at the Florence School of Banking and Finance, with expertise in the EU banking regulations and the economic reform of the Eurozone. In her commentary, she presented the latest evolution of the EU’s regulatory framework towards CCPs, also taking into account the recent vote on the amendment of the European Markets Infrastructure Regulation (EMIR) by the European Parliament on 18 April 2019. In this light, the presentation highlighted the main components of the new EU regulations, discussing how they can respond to some of the challenges presented by Professor Koeppl.

Download the presentation by Thorsten Koeppl

Download the presentation by Agnieszka Smolenska