The Cost of Clearing Fragmentation
(2023)
Journal Article
Benos, E., Huang, W., Menkveld, A. J., & Vasios, M. (2024). The Cost of Clearing Fragmentation. Management Science, 70(6), 3581-3596. https://doi.org/10.1287/mnsc.2023.4867
Fragmenting clearing across multiple central counterparties (CCPs) is costly because global dealers cannot net positions across CCPs. They have to collateralize both the short position in one CCP and an offsetting long position in another CCP. This,... Read More about The Cost of Clearing Fragmentation.