Central bank liquidity would help CCPs in distressed situations, says BIS
BIS weighs in on CCP central bank liquidity access debate
Central bank liquidity would help central counterparties (CCPs) meet obligations to pay any variation margin following a sudden default, according to a report by the Bank for International Settlements (BIS).
In a paper published in the latest BIS quarterly review, authors Daniel Heller and Nicholas Vause argue that access to central bank funds in distressed circumstances would help CCPs to make potentially significant variation margin payments in a timely manner.
"Participants are responsible
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