The Risk Controllers: Central Counterparty Clearing in Globalised Financial Markets

Contents

Preface

Acknowledgements

PART I CLEARING UP THE CRISIS

1 Unlikely Heroes

2 The Modern Central Counterparty Clearing House

2.1 The CCP's Unique Selling Point

2.2 Trading Venues and Clearing Markets

2.3 Managing Risk

2.4 Clearing Derivatives and Securities

2.5 CCPs as a Business

2.6 Netting Trades and Open Interest

2.7 Vertical and Horizontal Clearing Systems in the US

2.8 Vertical Versus Horizontal in Europe

2.9 Risk and Responsibility

2.10 Clearing up a Crisis

3 The Biggest Bankruptcy

3.1 An Inauspicious Start

3.2 LCH.Clearnet in the Front Line

3.3 LBIE – A Difficult Default

3.4 SwapClear in Focus

3.5 The Picture in Paris: LCH.Clearnet SA

3.6 Responses Elsewhere

3.7 Immediate Lessons from the Default

3.8 LCH.Clearnet Stands the Test

PART II THE ROAD TO CENTRAL COUNTERPARTY CLEARING

4 Early Clearing

4.1 The First Traders and Post-Trade Practices

4.2 Clearing in the Dutch Golden Age

4.3 The Spread of Clearing Houses

4.4 The Dojima Rice Market

4.5 Forwards and Futures

4.6 Trading and Clearing Cotton in Liverpool

4.7 Futures and Clearing in Chicago

4.8 Anti-Gambling Sentiment in the US

5 Innovation in Europe

5.1 Breakthrough in Le Havre

5.2 The Functioning of the Caisse

5.3 Europe Follows Le Havre's Lead

5.4 Anti-Gambling Sentiment in Europe

6 The London Produce Clearing House

6.1 Clearing for Profit

6.2 Establishment of LPCH

6.3 LPCH: Sugar and the German Connection

6.4 A Divided Market and a Clearing Competitor

6.5 LPCH and the First World War

6.6 LPCH: An Awkward Recovery ...