Joshua Slive - Latest

• Liquidity and Central Clearing: Evidence from the CDS Market

  Staff Working Paper 2012-38 Joshua Slive, Jonathan Witmer, Elizabeth Woodman

  An international initiative to increase the use of central clearing for OTC derivatives emerged as one of the reactions to the 2008 financial crisis. The move to central clearing is a fundamental change in the structure of the market.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets JEL Code(s): G, G3, G30, G38
• December 6, 2012

  The Canadian Approach to Central Clearing for Over-the-Counter Derivatives

  Financial System Review - December 2012 Nikil Chande, Jean-Philippe Dion, Darcey McVanel, Joshua Slive

  Content Type(s): Publications, Financial System Review articles
• November 15, 2012

  Access, Competition and Risk in Centrally Cleared Markets

  Bank of Canada Review - Autumn 2012 Jean-Sébastien Fontaine, Héctor Pérez Saiz, Joshua Slive

  Central counterparties can make over-the-counter markets more resilient and reduce systemic risk by mitigating and managing counterparty credit risk. These benefits are maximized when access to central counterparties is available to a wide range of market participants. In an over-the-counter market, there is an important trade-off between risk and competition. A model of an over-the-counter market shows how risk and competition could be influenced by the incentives of market participants as they move to central clearing. In a centrally cleared market, there may be less risk when participation is high. This helps to explain why regulators have put in place requirements for fair, open and risk-based access criteria.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial markets, Financial system regulation and policies, Market structure and pricing JEL Code(s): G, G1, G18, G2, G21, L, L1, L13

• When Lower Risk Increases Profit: Competition and Control of a Central Counterparty

  Staff Working Paper 2012-35 Jean-Sébastien Fontaine, Héctor Pérez Saiz, Joshua Slive

  We model the behavior of dealers in Over-the-Counter (OTC) derivatives markets where a small number of dealers trade with a continuum of heterogeneous clients (hedgers). Imperfect competition and (endogenous) default induce a familiar trade-off between competition and risk.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial stability, Financial system regulation and policies JEL Code(s): G, G1, G10, G18