When Does Portfolio Compression Reduce Systemic Risk?
October 1, 2020
October 1, 2020
In the U.S. and Europe, there is a post-trading netting mechanism that can potentially mitigate the risk of events that trigger severe market instability. However, while so-called portfolio compression can reduce systemic risk, it can also lead to defaults, writes Luitgard Anna Maria Veraart.
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