What’s the real risk of CCPs, counterparty risk or liquidity risk?

A recently issued academic paper from Dr. Rama Cont at Imperial College London makes the argument that CCPs don’t mitigate counterparty credit risk, they just transform it into liquidity risk. As a result, the best thing to do is assess whether a CCP is holding enough assets in its risk waterfall to account for liquidation costs. What does this mean for securities finance?
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