Buy side may have to take on CCP losses – FSB’s König
Exempting ailing banks from CCP wind-up process could force wider allocation of losses
Buy-side clearing firms could find themselves on the hook to help rescue a clearing house if it finds itself in difficulty, a senior regulator has suggested.
Elke König, chair of the Financial Stability Board (FSB) Resolution Steering Group, said buy-side clearing firms could be called upon to shoulder their share of losses from a failed central counterparty (CCP) if regulators exempted ailing banks from participating in the clearing house’s recovery and resolution processes, as she suggested
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