Central Clearing and Credit Risk Management - FRM Part 2

Learn the fundamentals of central clearing in this comprehensive FRM Part 2 video lecture covering Chapter 18 of Credit Risk Measurement and Management. Master key concepts including central counterparty (CCP) mechanics, novation processes, and multilateral netting systems. Explore margin requirements, default fund management, and loss waterfall structures while understanding how CCPs manage member defaults and associated risks. Compare bilateral versus central clearing approaches, analyze the relationships between initial margin and default fund requirements, and evaluate the pros and cons of centralized clearing systems. Gain essential knowledge for the FRM exam through detailed explanations of risk management techniques, clearing member obligations, and systemic risk considerations in modern financial markets.