Tensions at for-profit CCPs could put them at risk

Demutualised CCPs must find a way to keep clearing members engaged in risk management

Incomplete demutualisation is behind the growing tensions

Robert Cox and Robert Steigerwald are senior policy advisers at the Federal Reserve Bank of Chicago

Clearing members’ concerns about the risk management of some central counterparties (CCPs) have shown themselves recently in areas such as product offerings and emergency powers. This growing tension is the product of incomplete demutualisation, in which ownership – but not ultimate risk-bearing – has been demutualised.

The root problem is that clearing members feel they lack control over CCP risk