“If you asked a government agency to collateralise those exposures, what would they collateralise it with? Sovereign bonds. This would be futile, as it wouldn’t mitigate the credit risk, because if they go down the collateral is worth nothing”
Christian Lee speaks to Louie Woodall for Risk.net about why Esma questions CCP ‘free ride’ for sovereigns
Note: This news article was first published by Catalyst prior to the Sionic merger
