Banks and CCPs clash over non-default losses

Clearing house members have balked at being on the hook for catastrophic losses from investments or cyber attacks that threaten the solvency of a CCP – but clearers say they should share the load. Both agree further guidance is needed from regulators

Banks worry they have to give a blank cheque to CCPs

Nobody wants to be the last person at the table when it's time to settle the bill. Yet that's the position banks and their clients could find themselves in if a central counterparty (CCP) were to suffer significant losses – even if nobody has defaulted.

CCPs and their members acknowledge that non-default losses (NDLs) – those incurred by the clearing house unrelated to member defaults – are a risk that needs addressing urgently. In these events, the CCP would not have access to all its various