How do I manage counter-party risk on the BL TradeXchange?
Due to the nature of the platform and without the use of a broker, private loan assignments do carry a measure of counter-party risk. However, all member firms have the ability to choose whether or not they would like to work with a counter-party in effecting a loan assignment. In addition, BL Update provides a rating system on all counter-parties based on size of the firm and number of trades they have successfully executed through the platform. In general, BL Update seeks to be an active player in the secondary loan market, working with other industry groups to increase the transparency and efficiency of the market so as to reduce settlement days and minimize counter-party risk.
