CCPs urged to coordinate on default management
Regulators may need to provide a framework for CCP interaction in a crisis, says LCH
Every central counterparty (CCPs) prepares for the default of a large clearing member. But navigating a real-life crisis will require greater coordination between CCPs and standardisation of default management processes, regulators were told yesterday.
The largest CCPs have many of the same clearing members, and should one of these firms default, it could result in multiple CCPs running their default management processes at the same time.
In this scenario, healthy clearing members could be
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