It’s a scenario no central counterparty wants to experience: a member fails, and the upfront resources the CCP maintains to plug a default loss prove simply insufficient. As authorities get involved to resolve the default, it is forced to go cap in hand to its other members for funds.
On June 23, the European Union finalised legislation outlining just how much CCPs and their resolution authorities can levy from members – and how. The CCP Recovery and Resolution Regulation – as agreed by the
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