The Risk Controllers: Central Counterparty Clearing in Globalised Financial Markets

Preface

This history and account of central counterparty clearing is my second book dealing with an important financial infrastructure and covers a business that has shot to prominence since the bankruptcy of Lehman Brothers.

The Risk Controllers was conceived before the cataclysmic events of September 2008. As with my previous book – Plumbers and Visionaries: Securities settlement and Europe's financial market – the present volume is the result of a three-way collaboration between Chris Tupker, the former chairman of LCH.Clearnet, John Wiley & Sons, Ltd and myself.

Like the previous book, the origins of The Risk Controllers can be traced back to a lunch – this time in March 2008 – when I met Chris Tupker to chew over our experiences that resulted in the publication of Plumbers and Visionaries a few months before.

He suggested that I prepare a synopsis for a companion volume that would deal with the little known and rather abstruse business of CCPs, which ensure that trades in derivatives and securities markets will be completed in cases where one of the parties to a trade defaults.

As with the previous book, Chris Tupker's ambition was to have a book that would explain the business of clearing and how it worked to a wider audience and how an important but little known part of the financial world had developed over time in the context of society, politics and regulation.

After some hesitation, prompted mainly by a non-specialist's concern that clearing involved some highly technical ...