The structural comparison of central counterparty interoperability.

While a more integrated central counterparty (CCP) network via interoperability will provide users more cost efficient clearing and settlement services, it also increases the default transmission through the system. Using epidemic spreading model, it is found that a vertically interoperated CCP network is more robust compared with a horizontally interoperated one when certain condition is satisfied. Variation of the different transmission rates from both internal and external sources leads to different equilibrium. The safe range which is free from the crisis explosion state is identified and can be reached with certain policy coordination among nations. [ABSTRACT FROM AUTHOR]