Paul Tucker, the deputy governor for financial stability at the Bank of England, on Wednesday said a clear ex-ante framework was needed to limit the disorder caused by the failure of a central counterparty.

At a Centre for the Study of Financial Innovation event in London, Tucker said: "As with any business activity, if an institution is insolvent or otherwise cannot pay its debts, it has to stop trading, close and go into liquidation. That can be a disastrous course for a major financial