The Women Shaping Global Derivatives Markets: Meet the Speakers
In its latest episode, LaSalle Street, a podcast from the Financial Markets Group at the Federal Reserve Bank of Chicago, hosts a conversation on identity, gender and careers in finance with four women shaping global derivatives markets.
Joining LaSalle Street for this episode are Laura Astrada, Managing Director at DTCC; Caroline Pham, Managing Director and Head of Capital Markets Regulatory Strategy at Citi; Maggie Sklar, Director of International Engagement, the Federal Reserve Bank of Chicago; Petal Walker, Special Counsel, WilmerHale.
The guests discuss their own career paths, experiences with sexism and other forms of discrimination in the workplace, and the intersection of gender and the impact of Covid-19 on work.
Moderating the discussion is Nahiomy Alvarez, Senior Financial Markets Analyst at the Chicago Fed. Anna Paulson, Executive Vice President and Director of Research at Chicago Fed, provides an introduction. The episode was recorded during Women’s History Month, which was created to celebrate the many contributions and achievements of women.
Publications, conferences and news
Our staff frequently publishes articles, working papers, conference agendas, and more. You can view them all below, or use the dropdown to select a specific category.
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Climate Change Risk in Financial Markets: Advancing the Conversation in 2021
The Federal Reserve Bank of Chicago’s Financial Markets Group opened 2021 with a conversation on climate change risk in financial markets. Panelists representing diverse perspectives discussed the following: How has climate change risk impacted global financial markets to date, and what can we expect moving forward? What are some of the key developments to watch out for—in terms of technology, investing practices, new guidance, etc.? What role can financial markets and the public sector play in better managing this risk moving forward? What are some of the strengths of and opportunities for existing efforts?
Externalities in Securities Clearing and Settlement: Should Securities CCPs Clear Trades for Everyone?
by Sam Schulhofer-Wohl
The architecture of securities clearing and settlement in the United States creates an externality: Investors do not always bear the full cost of settlement risk for their trades and can impose some of these costs on the brokerages where they are customers. When markets are volatile and settlement risk is high, this externality can result in too much or too little trading relative to the efficient level, because investors ignore trading costs but brokerages may refuse to allow investors to trade. Both effects were evident during the recent volatility in GameStop stock. Alternative approaches for clearing customer trades that are used in derivatives markets would eliminate the externality. I examine the potential benefits and costs of different approaches for clearing customer securities trades as well as implications for the U.S. Treasury market, where there have been calls to investigate the costs and benefits of expanded clearing of customer trades, and the relationship to faster equities settlement.
“YOLOing the Market”: Market Manipulation? Implications for Markets and Financial Stability
by Maggie Sklar
Since the start of the Covid-19 pandemic in 2020, retail investors have increasingly participated at higher rates in the U.S. equities markets, particularly in day trading and short-term trading. In January 2021, amid a surge of online postings and interest by retail investors who use free trading apps, GameStop stock began moving up and down by billions of dollars a day—resulting in big gains for some investors and billions in losses for others. To the extent the proliferation of free trading democratizes the market, increases the diversity of participants able to participate in the market, and contributes to vibrant and healthy markets, this activity has positive benefits. These recent developments pose new questions for policymakers, such as whether the ability for users to gather together on social media and move the price of a financial product—for reasons unrelated to market news or market fundamentals—is a larger vulnerability, whether this activity fits into tools to prevent or stop market manipulation or not, and if there is a gap in regulatory ways to address such activity.
Treasury Market Structure Podcast
By Alessandro Cocco and Sam Schulhofer-Wohl
In this episode, experts from industry, academia, and government discuss the operations of and recent stresses in the U.S. Treasury market. This market has a huge impact across the financial system—from determining the borrowing costs for governments to serving as a key benchmark within the financial system to helping to keep credit flowing to people who need it.
Can Central Counterparties (CCPs) Use Improved Buffers to Reduce Cyclical Funding Demands on the Market?
By Ketan B. Patel
In this blog post, Ketan B. Patel investigates changes in margin at central counterparties (CCPs) during the market stress of 2020:Q1 to show how reactive CCP funding demands were to the increase in market volatility. He examines whether rainy day funding in the form of buffers might be useful in supporting the broader resilience of the clearing ecosystem.
A New Framework for Assessing Climate Change Risk in Financial Markets
By Nahiomy Alvarez, Alessandro Cocco, and Ketan B. Patel
While there is growing recognition that climate change poses a new risk for the economy, more research is needed to understand how climate change risk affects global financial markets. We establish a new framework for this research by merging the climate change risk categories of physical risk, transition risk, and liability risk with the risk categories commonly assessed in the financial markets: market risk, credit risk, liquidity risk, and operational risk. We then factor in market structure and market regulation as we seek to assess the overall impact of these variables on systemic risk. Our framework shows that climate change affects each of the risk-management categories commonly assessed in the financial markets as well as the ways that they interact to generate broader systemic risk.
7th Annual Conference on CCP Risk Management
Ketan B. Patel will moderate a panel discussion on Resilience and Lessons Learned in Central Clearing in 2020. Senior policymakers, central bankers, market regulators, industry leaders and others are invited to participate in the conference. The CCP Risk Management Conference is by invitation only. To encourage candid discussion among invited participants, the conference is conducted under the Chatham House rule and is not open to the press. This conference has been very well attended in the past.
Diversity in Financial Markets
The Chicago Fed and FIA teamed up with a group of expert panelists to explore past and present experiences, as well as the outlook for diversity in financial markets. The panelists explored why diversity is important, how to achieve it, and what metrics could be used to determine progress. During this interactive webinar, panelists also shared their experiences and answer audience questions on impactful changes and how to move your organization and the broader industry forward.
What Are the Financial Systemic Implications of Access and Non-Access to Federal Reserve Deposit Accounts for Central Counterparties?
By Maggie Sklar
In this working paper, I examine the interconnections between designated derivatives central counterparties (CCPs) with Federal Reserve deposit accounts and non-designated CCPs and the potential financial stability implications. This working paper notes the interconnections between the non-designated and designated derivatives CCPs through their clearing members and the commercial custodial banks they utilize to hold and transfer collateral. The paper then identifies additional potential contagion risks and financial stability risks, including liquidity risk, market risk, concentration risk, and loss of confidence more broadly. Although there are a number of research articles addressing these topics with respect to designated CCPs or OTC derivatives, this working paper includes the perspective looking at U.S. futures CCPs and non-designated CCPs.
The Future of Innovation in an Inclusive Chicago
Chicago is a global hub for innovation in finance, technology, and other sectors. Yet continued innovation is not a given, and the makeup of the city’s population has not been reflected in its most innovative industries. How can Chicago’s history of innovation continue, and how can it include all residents of the city?
Law & Compliance Division Conference
Robert Steigerwald participated in a panel discussion of “CCP Risk” at the Futures Industry Association’s Virtual Law & Compliance Conference. The panel discussed CCP risk management issues, including the CCP risk whitepaper, as well as newly finalized amendments to Part 39 regulations.
What Risk Managers from NASDAQ and Options Clearing Corp Learned From the Covid-19 Crisis: Perspectives on Resilience and Challenges During the Pandemic
This episode of LaSalle Street welcomes chief risk officers from Options Clearing Corporation and Nasdaq Inc. to discuss what the pandemic is teaching us about risk management and global financial markets.
Clearinghouse Risk, Reference Rates, and Cryptocurrency with Former CFTC Chair J. Christopher Giancarlo
The Honorable J. Christopher Giancarlo was on the frontlines of the biggest issues shaping global financial markets as the 13th chairman of the U.S. Commodity Futures Trading Commission (CFTC). Known by some as "CryptoDad," Giancarlo visits LaSalle Street to discuss his reflections a year after leaving the CFTC, key issues he faced during his tenure, and emerging issues shaping the markets today. The conversation includes discussion of clearinghouse risk and the work of the Financial Stability Board, the risks embedded in reference rates, and why regulators should be investing time in the future of digital currency.
The Influence and Limits of Central Bank Backstops
By Sam Schulhofer-Wohl
In this post, I explain how central banks’ “backstop” lending facilities can influence financial conditions even when the facilities see relatively little borrowing. The knowledge that credit is available, even if at a relatively high penalty interest rate, can calm markets and encourage confidence in the economy. The availability of a backstop can also influence interest rates on private-sector transactions. However, backstops aim to support normal market functioning—not to make credit cheaper or more plentiful than what a normally functioning market would deliver.
Chicago Fed Hires Ketan B. Patel as Policy Advisor and Head of Financial Markets Risk Analysis
Patel will be responsible for analyzing the public policy implications of risks in financial markets and financial market infrastructures. The group’s research on financial market institutions, technology and infrastructure helps inform and foster stable and efficient national monetary, financial and payments systems.
Monetary Policy Implementation With an Ample Supply of Reserves
By Gara Afonso, Kyungmin Kim, Antoine Martin, Ed Nosal, Simon Potter and Sam Schulhofer-Wohl
Chicago Fed Hires Maggie Sklar as Senior Policy Advisor and Director of International Engagement
Maggie Sklar joined the economic research department as senior policy advisor and director of international engagement in the financial markets group. Sklar reports to Vice President Alessandro Cocco.
Can Broader Access to Direct CCP Clearing Reduce the Concentration of Cleared Derivatives?
By Nahiomy Alvarez
Chicago Fed Hires Vice President of Financial Markets Group
The Federal Reserve Bank of Chicago announced that Alessandro Cocco will join the economic research department on October 21 as vice president of the financial markets group. Cocco will report to senior vice president Sam Schulhofer-Wohl.
Understanding Recent Fluctuations in Short-Term Interest Rates
By Sam Schulhofer-Wohl
Second Joint Deutsche Bundesbank - European Central Bank - Federal Reserve Bank of Chicago Conference on CCP Risk Management
Conference agenda
The Concentration of Cleared Derivatives: Can Access to Direct CCP Clearing for End-Users Address the Challenge?
By Nahiomy Alvarez and John W. McPartland
First Joint Deutsche Bundesbank - European Central Bank - Federal Reserve Bank of Chicago Conference on CCP Risk Management
Conference agenda
First Joint Deutsche Bundesbank - European Central Bank - Federal Reserve Bank of Chicago Conference on CCP Risk Management
Conference summary
Symposium on OTC Derivatives and Central Clearing
Conference agenda
Managing Risk in Global Financial Markets: CCP Governance, Supervisory Stress Testing, and Default Management Auctions
By Nahiomy Alvarez
International Regulators Conference
Conference agenda
Central Counterparty Risk Management: Beyond Default Risk
By Rebecca Lewis
Symposium on OTC Derivatives—A Conference Summary
By Rebecca Lewis and Ning Yu
A CCP Is a CCP Is a CCP
By Robert Cox and Robert Steigerwald
Statement on 'Clearing the Next Crisis: Resilience, Recovery and Resolution of Derivatives Clearinghouses'
By Robert Steigerwald
The Goldilocks Problem: How to Get Incentives and Default Waterfalls 'Just Right'
By John W. McPartland and Rebecca Lewis
Non-Default Loss Allocation at CCPs
By Rebecca Lewis and John W. McPartland
Blockchain and Financial Market Innovation
By Rebecca Lewis, John W. McPartland and Rajeev Ranjan
Resolving Central Counterparties after Dodd-Frank: Are They Eligible for 'Orderly Liquidation'?
By Robert Steigerwald and David W. DeCarlo
Symposium on OTC Derivatives
Conference agenda
Symposium on Central Clearing
Conference agenda
Fourth Annual Conference on CCP Risk Management
Conference agenda
Taking a Deep Dive into Margins for Cleared Derivatives
By Rebecca Lewis
First Joint Deutsche Bundesbank - European Central Bank - Federal Reserve Bank of Chicago Conference on CCP Risk Management
Conference agenda
Issues in clearing and settlement
Conference agenda
Conference on CCP Public Quantitative Disclosure
Conference agenda
Third Annual Conference on CCP Risk Management
Conference agenda
A New Approach to Stock Market Execution
By John W. McPartland and Rebecca Lewis
2015 Symposium on Central Clearing
Conference agenda
2015 Conference on CCP Risk Management — Central Counterparty Resolution
Conference agenda
2014 Derivatives Symposium
Conference agenda
CCP Recovery and Resolution Conference
Conference agenda
The Role of Time-Critical Liquidity in Financial Markets
By Robert Steigerwald and David Marshall
Recommendations for Equitable Allocation of Trades in High Frequency Trading Environments
By John W. McPartland
How Do Clearing Organizations Control the Risks of High Speed Trading?
By John W. McPartland and Carol Clark
2013 Derivatives Symposium
Conference agenda
Public Policy Symposium on Central Clearing of OTC Derivatives
Conference agenda
What Tools Do Vendors Provide to Control the Risks of High Speed Trading?
By Carol Clark, Richard Heckinger, Rajeev Ranjan and John W. McPartland
What Is Clearing and Why Is It Important?
By Robert Steigerwald and Ed Nosal
Clearing and Settlement of Exchange Traded Derivatives
By John W. McPartland, 2009
Derivatives Clearing and Settlement: A Comparison of Central Counterparties and Alternative Structures
By Robert Steigerwald and Robert R. Bliss, 2006
Foreign Exchange Trading and Settlement: Past and Present
By John W. McPartland, 2006
Policymakers, Researchers, and Practitioners Discuss the Role of Central Counterparties
By Douglas D. Evanoff, Daniela Russo, and Robert Steigerwald, 2006
Featured publication
A CCP Is a CCP Is a CCP
By Robert Cox and Robert Steigerwald
Central counterparties (CCPs) are an important part of contemporary financial market infrastructure. The orderly risk management operations and financial resilience of CCPs and other market infrastructures are essential for financial stability. This paper discusses many differences between CCPs and banks and the significance of those differences, including their business models and risk profiles, with CCPs acting as risk managers that are uniquely subject to the credit and liquidity risk of clearing member default.
Meet our staff
The Financial Markets Group analyzes public policy issues in financial markets from multiple perspectives. The group applies legal, market practitioner, technological and other expertise to study challenges and risks in financial markets and infrastructures.
By communicating its findings to policymakers, regulators, industry leaders and the public, primarily through published work and conferences, the group contributes to the Federal Reserve’s mission of fostering the stability, integrity, and efficiency of the nation’s monetary, financial, and payment systems. The group has particular expertise in the derivatives markets and clearinghouses in which Chicago is a global leader.
We support a diverse and inclusive work environment where employees and stakeholders are respected, treated fairly, and given equal opportunities to perform to their fullest potential. By valuing diverse experiences, styles, approaches and ideas, we can achieve our goals, serve our stakeholders and become a higher-performing organization.
