LCH.Clearnet welcomes the work underway at national, EU and international level to improve transparency of CCPs' risk management policies and procedures and further strengthen their resilience.
Recent debate on the issues of recovery and resolution has focused on a CCP's total loss absorbing capacity and the size of a CCP's own resources. However, in our view the risks to which CCP members are exposed are different to those of a CCP operator, such as LCH.Clearnet; the debate has blurred the distinction between the resources of the clearing members and those of the CCP operator.
The paper outlines our approach to three key areas which have been the subject of this debate: risk management; recovery; and resolution. Based on our broad product experience and extensive geographic reach, we also outline some key principles that we believe should guide legislators' work in defining CCP recovery and resolution regimes globally.
Click to download full paper