What is the role of a Central Counterparty (CCP)?

Question

Answer

A CCP is especially usefull in interbanking transactions, and Over the Counter (OTC) which are not organized on a central exchange.

Answer

A CCP is an independent handler of financial transactions ensuring that buyers and sellers meet their obligations.

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A CCP is an exchange where you can sell a financial instrument without having a buyer.

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A CCP is a bank for banks responsible for clearing and settlement of transactions.

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If a trade is organized on a central exchange, there is no need for a CCP.

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