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Finance & Banking vocabulary · Banks & Institutions

Central counterparty

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, central counterparty means: An entity that stands between trading parties, becoming the buyer to sellers and seller to buyers.

In Turkish: merkezi karşı taraf

How it is used

Abbreviated CCP; central clearing changes counterparty relationships but does not eliminate all risk.

Example sentences

  1. The central counterparty required additional collateral after prices moved sharply.

    The intermediary manages exposures created by the cleared positions.

  2. Both dealers face the central counterparty after the trade is cleared.

    Each dealer's obligation is now to the clearing entity.

Common collocations

  • central counterparty clearing
  • CCP default fund
  • counterparty riskThe risk that the other party in a financial deal, such as a derivative, repo or FX trade, fails to pay or deliver what it owes before the deal is completed.
  • collateralAn asset, such as property, cash or securities, that a borrower pledges to a lender and that the lender can sell if the loan is not repaid.

More terms: Banks & Institutions

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This page explains English vocabulary for learners. It is not financial advice.