In addition, while JGBCC and other CCPs suffered losses from the closingout of LBJ’s outstanding positions, those losses were fully covered by collateral that LBJ provided. 4 Having said that, there is still room for improvements in CCPs’ risk management framework. Moreover, there is also a long-standing issue with respect to JGBCC.
In the last year and a half, these factors have manifested themselves in the movement of global capital into US assets (away from core Europe and emerging markets), an appreciating trend in the US dollar and a decline in global long-term interest rates.