Contagion can spread via cross-asset links, ECB study shows

Research throws more light on the hidden risks of central clearing

Data

Financial stress can move between central counterparties, clearing members and their clients more widely than previously thought, recent research suggests.

A study by two European Central Bank (ECB) market infrastructure specialists uses network theory to build a picture of the complex latticework of links between derivatives clearing participants in the eurozone. The research echoes the findings of earlier work in showing a concentration of risk among a few members.

But it also reveals fresh

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