Corporate Advisory

Regulators focus on CCP Resilience and Recovery Planning

Global regulators proposed tougher standards for clearinghouses at the heart of the trillion dollar derivatives market, taking some of the biggest steps yet to prevent the platforms from becoming too big to fail.

The Financial Stability Board and other securities regulators recently published guidelines for clearinghouses to bolster their assessments of risks and improve plans for how they’d recover after the default of major bank members. The recommendations came after regulators found some clearinghouses negligent in complying with existing standards.

The Basel-based FSB, whose members include the Bank of England and U.S. Federal Reserve, also began to lay out how regulators could resolve a clearinghouse if its own recovery plan fails.

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