Copying and distributing are prohibited without permission of the publisher
CME Clearing Europe accepts gold
17 August 2012
The European CCP has followed the lead of other CCPs in extending its collateral eligibility range
CME Clearing Europe
CME Clearing Europe now accepts gold as collateral, following the lead of its rival European CCPs.
The announcement comes at a time when the volume of cleared OTC derivatives is increasing in Europe – and globally due to new regulation.
CCPs are increasingly been pushed to consider extending the range of collateral types they will accept in order to stop business from going to a rival CCP.
Market participants are increasingly talking about a ‘battle for collateral’ where buy-side firms that trade OTC derivatives will not necessarily have access to the type of high quality collateral that CCPs require.
This has sparked fears that CCPs could relax their collateral eligibility range to the extent that it would increase risk, which contradicts the regulators’ aim to reduce risk.
CME Clearing and ICE Clear Europe also accept gold as collateral, and LCH.Clearnet started accepting it last year.