Conference Agenda

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Session Overview
Session
Session 4.02: Mandatory Central Clearing and Derivative Offsetting
Time:
Tuesday, 26/Aug/2025:
9:30am - 10:00am

 Location: Tosca Conference hall

Meeting hall “Tosca”, which can accommodate up to 60 people

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Presentations

Mandatory Central Clearing and Derivative Offsetting

Prof. John Zhang

Audencia Business School, France

Exploiting the adoption of mandatory central clearing by U.S. regulators, we explore the effects of this regulatory reform on banks’ derivative offsetting. Using a triple-difference testing procedure, we find that derivative offsetting increases (decreases) for banks with higher (lower) capital ratios after the adoption of mandatory central clearing, in comparison to the control group. The results are economically significant and robust to a variety of alternative measurements and tests. Our findings suggest banks with different target capital ratios respond to central clearing reform differently.