Thank you for the opportunity to be part of this important discussion on counterparty credit risk.1 It's particularly appropriate for the Federal Reserve Bank of New York to host these discussions. Twenty-five years ago, New York Fed officials convened the creditors of Long-Term Capital Management (LTMC) to facilitate the firm's stabilization. LTCM was a heavily leveraged hedge fund that had borrowed more than $125 billion from its counterparties and had derivatives estimated at over $1 trillion in notional value. Stabilizing LTCM narrowly averted significant financial stress, an event I remember vividly from my ... (full story)