FSB consults on whether existing financial resources are enough for CCP resolution

Financial resources to support CCP resolution and the treatment of CCP equity in resolution

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This discussion paper seeks comment on financial resources to support central counterparty (CCP) resolution and the treatment of equity in CCP resolution. It builds on the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes) and FSB Guidance on Central Counterparty Resolution and Resolution Planning.

Centrally clearing standardised over-the-counter (OTC) derivatives is a pillar of the G20 Leaders’ commitment to reform OTC derivatives markets in response to the global financial crisis. CCPs’ criticality to the overall safety and soundness of the financial system means that authorities must take steps to ensure that CCPs do not themselves become a source of systemic risk and that any CCP can be successfully resolved without resort to a government bailout.

The FSB has concluded that further guidance on the necessary financial resources should be developed in an evidence-based way including by drawing on the practical experience gained from resolution planning by relevant authorities and Crisis Management Groups.

To inform this process, the FSB has, in consultation with the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions, developed a discussion paper that sets out considerations that may be relevant to evaluating whether existing financial resources and tools are adequate to implement resolution strategies for individual CCPs; and considerations that could guide authorities in developing possible approaches to the treatment of CCP equity in resolution.

 

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