New guidances on Central counterparty (CCP) resilience, recovery and resolution
On 5 July 2017`The Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI)
On 5 July 2017`The Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissioners (IOSCO) and the Basel Committee on Banking Supervision have published three guidance documents that cover:
- CCP resilience – This guidance focuses on governance, credit and liquidity stress testing, coverage, margin, and contributions from a CCP’s own financial resources to meet losses.
- CCP recovery – This guidance focuses on making recovery plans operational; the replenishment of financial resources; dealing with non-default related losses; and transparency with respect to recovery options and how they would be applied.
- CCP resolution – The guidance covers the powers that resolution authorities should have in place to maintain the continuity of critical CCP functions; the use of loss allocation tools; and the steps that authorities should take to develop resolution plans and to establish crisis management groups for relevant CCPs.
The FSB will undertake further work on financial resources for CCP resolution and, based on further analysis and experience gained in resolution planning, determine by end-2018 whether it should develop further guidance on CCP resolution.