European Parliament Library

Central Counterparties Resolution—An Unresolved Problem, Manmohan Singh, Dermot Turing

Recovery and resolution regimes are being developed for central counterparties (CCPs). We analyse current resolution tools in the context of policy, which is to restore the critical functions of a failed CCP. We conclude that the toolkit is insufficient to avoid the costs of resolution being borne by taxpayers, and propose alternative policy suggestions for addressing the problem of a failed CCP
Table Of Contents
Cover -- Contents -- Central Counterparties Resolution -- An Unresolved Problem -- Abstract -- Introduction -- I. Role, Structure, and Economics of CCPs -- II. Recovery and Resolution for CCPs -- III. Review of Policy for CCP Resolution -- A. Recovery and Resolution Ought to be Different Concepts -- B. Governance and Stakeholders in CCP Resolution -- C. Resolution Tools -- D. Variation Margin Gains Haircut -- E. No Creditor Worse Off (NCWO) -- F. Overview of the CCP Resolution Toolkit: -- IV. A Revised Policy Approach -- A. The Clearing Obligation Should be Relaxed -- B. CCPs Should Widen Sources of Capital, and Build Reserves -- C. Failed CCPs Should be Scrutinized -- V. Concluding Remarks -- Tables -- 1. Comparison of Debt Against Default Fund Size of CCPs in Large -- 2. Survey of Tools Proposed for CCP Resolution -- Boxes -- 1. A Hypothetical Waterfall Situation -- 2. Some Characteristics Where the CCP's Waterfall Resources may be Inadequate -- 3. Non-Default Losses -- 4. Should Mandatory Clearing be Relaxed? -- References
Literary Form
non fiction
Physical Description
1 online resource (24 pages)
Specific Material Designation
Form Of Item

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