The Risk
Central counterparties (CCPs) have a systemically important role in resolving many of the issues that triggered the 2007 global financial crises, both in clearing OTC derivatives markets and domestic cash markets. Every CCP has its own way of operating, different margin models, risk waterfalls, financial, ownership and governance models.
- What happens to your collateral contribution in the event of a default?
- What happens to your open positions?
- If a major participant at the CCP goes into default, how quickly does your collateral come under threat?
These questions and others are hugely important for deciding which CCP(s) best fits investor needs. There is huge potential for systemic risk in CCPs and the consequences of failure could be very serious for clearing members, their clients, and the wider market.
The Solution
Thomas Murray has addressed the global regulatory and risk imperative to assess and monitor CCPs as risk concentrating vehicles. CCP Risk Assessments assess the extent to which a CCP manages your risk burden. There are two key benefits:
- Every assessment brings transparency to the industry for the benefit of users
- Using Thomas Murray provides cost savings to regulated firms that are required to perform due diligence and risk assessments on CCPs
Thomas Murray assesses risks at CCPs across six categories:
Counterparty risk
Liquidity
Asset safety
Financial risk
Operational risk
Governance and transparency
We safeguard clients and their communities
Petroleum Development Oman Pension Fund
“Thomas Murray has been a very valuable partner in the selection process of our new custodian for Petroleum Development Oman Pension Fund.”
ATHEX
"Thomas Murray now plays a key role in helping us to detect and remediate issues in our security posture, and to quantify ATHEX's security performance to our directors and customers."
Northern Trust
“Thomas Murray provides Northern Trust with a range of RFP products, services and technology, delivering an efficient and cost-effective solution that frees our network managers up to focus on higher Value activities.”
Insights
Common Operational Red Flags Investors Miss in Due Diligence
Operational failures rarely come with warning signs until you know what to look for.
The Hidden Costs of Spreadsheet-Based Due Diligence
For decades, spreadsheets have been the default tool for operational due diligence. But the costs of this approach are becoming impossible to ignore.
Thomas Murray Launches “Beneath the Asset” Initiative
New analysis warns the classic understanding of asset safety is being fundamentally reshaped.
Missing Security Provisions: 10 Key Questions every Private Equity firm should ask their MSP
Most private equity firms assume their MSP is handling cyber security. Most are wrong.
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