A couple of people have expressed interest in my paper on clearing mandates and systemic risk. So here it is.
In a nutshell: the arguments that clearing (and non-cleared derivatives) collateral mandates will reduce systemic risk are fundamentally flawed. Ironically, this is because the analyses do not take a truly systemic approach.
My counterarguments will be familiar to those reading my posts on clearing over the past five years (!) but this piece lays them out in one place. One stop shopping, as it were. Or maybe one stop slashing. (One of my lawyer clients remarked to his partner yesterday that I wrote “slashing” blog posts. I said “Don’t leave out the burning!”)