The Compelling Case For Clearing
- Topics:
- Commercial Lending
- Tags:
- Benefits,
- Exposure,
- Government,
- Human Resources,
- Regulations,
- Tractebel
- Source:
- Tractebel
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Overview: The article first gives the background Information on Tractebel, then explains benefits of multilateral netting using some examples. Without multilateral netting, the total guaranty (credit) exposure is $172 MM. It shows an example where multilateral netting reduces the guaranty (credit) exposure by 88%. Multilateral netting reduces the average exposure, as well as the variance in the exposure. The need for credit risk capital is reduced according to the Tractebel simulation by at least 75%. In the end the article describes the role of regulation as presented at FERC/CFTC technical conference.
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Format: HTML | Size: 160KB | Date: Jan 2003 | Pages: 9
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