Resolution still essential for CCPs – BoE’s Cunliffe
Despite high loss absorbency, CCPs still need a resolution framework, deputy governor says
Central counterparties (CCPs) have the resources to withstand major financial shocks, but still require a strong resolution framework, the Bank of England’s Jon Cunliffe said on June 5.
Since the 2008 crisis, the tangled network of derivatives contracts has been drastically simplified through central clearing, the deputy governor said in a speech. CCPs still face risks from the default of a counterparty, but hold “considerable” loss-bearing capacity.
UK CCPs are protected by around £145
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