abcd

问题如下：

By using a clearinghouse to handle the repo transactions between ABC and Repo Co., obligations owed between the two could have been netted once the fraudulent documentation was discovered. Which of the following is the most appropriate type of netting to use in this situation and what would be a likely additional impact from using this netting?

选项：

A.

Payment netting would be used, which would reduce ABC's counterparty risk, but this risk would be transferred to other creditors outside the clearinghouse

B.

Payment netting would be used, which would reduce Repo Co.'s counterparty risk, but ABC's counterparty risk would be increased.

C.

Closeout netting would be used, which would reduce ABC's counterparty risk, but this risk would be transferred to other creditors outside the clearinghouse.

D.

Closeout netting would be used, which would reduce Repo Co.'s counterparty risk, but ABC's counterparty risk would be increased.

解释：

Payment netting per the reading is the simple netting of cash flows due on the same day. Closeout netting occurs if there is an event of default, which would include an incidence of fraud. One of the shortcomings of clearinghouses, and closeout netting as well, is that the other party, in this case ABC Bank, jumps to the head of the queue with its claim on Repo Co. to the possible detriment of others, particularly those outside the clearinghouse in general