Q-601.2. Consider the four counterparties illustrated below on the left (A, B, C, and D), which illustrates their initial bilateral credit exposures. An arrow indicates the direction of money owed. For example, Counterparty D has a credit exposure of 100.0 to Counterparty C, while Counterparty B has an exposure of 100.0 to entity D. Clearing rings can reduce bilateral exposure.

As Gregory writes, "Clearing rings were relatively informal means of reducing exposure via a ring of three or more members. To achieve the benefits of 'ringing', participants in the ring had to be willing to accept substitutes for their original counterparties. Rings were voluntary but once joining a ring, exchange rules bound participants to the ensuing settlements. Some members would choose not to join a ring whereas others might participate in multiple rings. In a clearing ring, groups of exchange members agree to accept each other's contracts and allow counterparties to be interchanged."

In the OTC derivative market, the historical function of a clearing ring is essentially performed by compression.

Assume a clearing ring achieves the configuration above on the RIGHT. Which of the following is NOT NECESSARILY true about this application of the clearing ring?