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Recovery and resolution regimes for CCPs: Making financial markets resilient to the most extreme events
Journal of Securities Operations & Custody,
9
(2),
98-105
(2017)
Abstract
This paper aims to describe the design of an effective recovery and resolution regime for central counterparties (CCPs), which has become increasingly imperative as a result of the positive performance of CCPs to contain contagion during the financial crisis that erupted in 2008, which led authorities to foster the use of CCPs to contain risk in financial markets. It is more than crucial to ensure that CCPs provide an adequate protection to their customers, for their benefit and the benefit of the market as a whole. In line with this, regimes for recovery and resolution of CCPs are currently in the process of being implemented across the world. While the events that would lead to the implementation of a CCP’s recovery and resolution regime are extremely unlikely, far worse than the ones that led to the eruption of the financial crisis in 2008, the right tools should, however, be ready for CCPs and authorities to ensure that these events can be dealt with smoothly and that financial markets are resilient to the most extreme events.
Keywords: central counterparty (CCP), clearing, recovery, resolution, financial stabilty, incentives
The full article is available to subscribers to the journal.
Author's Biography
Rafael Plata is the Secretary General of the European Association of CCP Clearing Houses (EACH), the trade organisation that represents the interests of central counterparties (CCPs) in Europe. A government affairs professional with over 15 years of experience in the financial services industry, Rafael has also represented the interests of stock exchanges, worked at the European Parliament and as an investment consultant for the pension funds sector. He is an invited lecturer on CCP Clearing at the Solvay School of Economics and Management and an Editorial Board member of the Journal of Securities Operations & Custody and Technology.
