(AGENPARL) - Roma, 13 Febbraio 2023 - (AGENPARL) – lun 13 febbraio 2023 Feb. 13, 2023
Risk Spotlight: Central Counterparties – Lessons Learned from LME’s Nickel Market Closure
Views and opinions expressed are those of the authors and do not necessarily represent official positions or policy of the OFR or Treasury.
Nickel Prices Tripled, and Margins Were Insufficient to Cover a Default
On March 7 and 8, the price of nickel nearly tripled, from an opening price of $29,770 per metric ton on March 7 to a high of $101,365 per metric ton on March 8—an order of magnitude higher than the prior two-day price moves. This made the existing margin charges of $2,000 per metric ton insufficient to cover the CCP in the event of a default. As prices surged, the exchange decided to close the market and cancel some trades, rather than risk default by several of its members and their clients.
About the OFR
The Office of Financial Research (OFR) helps to promote financial stability by looking across the financial system to measure and analyze risks, perform essential research, and collect and standardize financial data.
Connect with Us
—————————————————————