Systemic risk safeguards for central counterparties
Abstract
The financial crisis of 2008 underscored the critical importance of central counterparties (CCPs) in mitigating systemic risk within the derivatives market. CCPs function as intermediaries, assuming counterparty risk to enhance market stability. This paper explores the comprehensive CCP risk waterfall framework, evaluates its robustness under prolonged market stress and provides actionable recommendations for fortifying CCP resilience. Through theoretical models and empirical simulations, the paper illustrates how CCPs manage systemic shocks and proposes improvements for future robustness. This article is also included in The Business & Management Collection which can be accessed at https:// hstalks.com/business/.
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Author's Biography
Helios Padilla Mayer is a seasoned investment and risk management professional with extensive experience in asset management, financial stability and systemic risk mitigation. He currently serves as Fund Manager at Naab Capital, a Luxembourg/USA investment firm, where he oversees portfolio management, risk frameworks and compliance with European regulatory standards. Throughout his career, Helios has contributed to the development of central counterparty (CCP) risk models, stress testing methodologies and innovative strategies for managing systemic financial risk. Helios holds multiple advanced degrees in finance and economics and has been actively involved in cross-border projects to strengthen risk management practices within the European financial sector. His work focuses on integrating advanced analytics, stress testing and regulatory compliance to enhance financial market resilience.
