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What Is Aggregation Or Interconnection Risk? |
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Answer» AGGREGATION or interconnection RISK refers to the risk that a disruption in one market, caused by the default of a major institution or some other event, MIGHT cause widespread difficulties throughout the OTC DERIVATIVES market or even SPREAD to other financial markets. Market liquidity risk is one source of interconnection risk. OTC derivatives dealers operate in many different markets at once. Aggregation or interconnection risk refers to the risk that a disruption in one market, caused by the default of a major institution or some other event, might cause widespread difficulties throughout the OTC derivatives market or even spread to other financial markets. Market liquidity risk is one source of interconnection risk. OTC derivatives dealers operate in many different markets at once. |
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