medium · FRM Part 1 Financial Markets and Products
According to the standard 'Default Waterfall' of a Central Counterparty (CCP), which layer of financial resources is typically the first to absorb losses from a member's default?
- The initial margin of the non-defaulting surviving members.
- The mutualized default fund contributions of surviving members.
- The CCP's own dedicated capital (skin in the game).
- The defaulting member's own initial margin.
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