Authors: John Heilbron, Stathis Tompaidis
What demands do central counterparties (CCPs) place on clearing members during episodes of extreme market stress? A new OFR Working Paper by John Heilbron and Stathis Tompaidis estimates the magnitude of such demands by focusing on the U.S. G-SIBs. This working paper examines whether clearing members can meet such demands, noting that their liquidity and capital resources may be depleted during those periods when CCPs make demands. The clearing members can meet resource demands, but the demands are non-negligible and vary across institutions.
The full paper is available here.