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Limiting Taxpayer “Puts” [electronic resource] : An Example from Central Counterparties, Singh, Manmohan..

Author/Creator:
Singh, Manmohan.
Publication:
Washington, D.C. : International Monetary Fund, 2014.
Format/Description:
Government document
Book
1 online resource (16 p.)
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 14/203.
IMF Working Papers; Working Paper No. 14/203.
Status/Location:
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Local subjects:
Banks. (search)
Burden sharing. (search)
Central counterparties. (search)
Corporation and Securities Law. (search)
Government Policy and Regulation. (search)
International Financial Markets. (search)
International Monetary Arrangements and Institutions. (search)
Lender of last resort. (search)
Lender-of-last-resort. (search)
Mortgages. (search)
Nonbank financial sector. (search)
Other Depository Institutions. (search)
Risk management. (search)
Systemically important financial institutions. (search)
Too-important-too-fail. (search)
Variation margin gains haircut. (search)
Summary:
Nonbanks such as central counterparties (CCPs) are a useful lens to see how regulators view the role of the lender-of-last-resort (LOLR). This paper explores the avenues available when a nonbank failure is likely, specifically by considering the options of keeping CCPs afloat. It is argued that CCPs have, by regulatory fiat, become “too important to fail,” and thus the imperative should be greater loss-sharing by all participants that better align the distribution of risks and rewards of CCPs, the clearing members and derivative end-users. In the context of LOLR, the proposed variation margin gains haircut (VMGH) is discussed as a way of limiting the taxpayer put.
Notes:
Description based on print version record.
Contributor:
Singh, Manmohan.
Other format:
Print Version:
ISBN:
1498322425:
9781498322423
ISSN:
1018-5941
Publisher Number:
10.5089/9781498322423.001
Access Restriction:
Restricted for use by site license.