24 key hedge funds sign single name CDS clearing pledge

A group of 24 asset managers has signed a pledge to trade single name CDS through central counterparities.  

TAGS: CDS

Comment by: Anonymous. Posted 8 years ago [2015-12-17 23:55:38]

The hedge funds will trade with a clearing member which, in turn, faces the CCP. This clearing method does not protect the HF against failure of the clearing member. So if you're the HF, you haven't removed your counterparty risk (think Lehman).