On 14 May 2025, the Bank of England (BoE) published a speech on ‘A system-wide approach to system-wide resilience: CCPs and their users’, which was delivered by its deputy governor for financial stability, Sarah Breeden, at the ISDA Annual General Meeting.
In the speech, Ms Breeden sets out the critical role of central counterparties (CCPs), noting that central clearing plays a key part in managing risks and maintaining resilience. Given this important role, Ms Breeden flags the need to ensure CCPs remain resilient and, in doing so, to take a system-wide approach to regulating them to ensure that their actions do not amplify shocks in times of stress (whilst also remaining prudent from a micro-prudential perspective).
Ms Breeden also discusses the role played by CCP users in reducing financial stability risks, and the importance of measures to improve resilience in core markets.
Other key points from the speech include:
- During 2025, the BoE plans to start implementing international recommendations that build on the Basel Committee on Banking Supervision, the Committee on Payments and Market Infrastructures, and the Board of the International Organization of Securities Commissions’ review of margining practices (published in 2022). It will also continue working with international standard setting bodies to embed the proposals into the existing frameworks of international standards for financial market infrastructures.
- The BoE is working with the Financial Stability Board (FSB) to consider the feedback received on the FSB’s consultation paper on non-bank financial intermediation and to finalise recommendations.
- A BoE discussion paper is planned for later in 2025 on possible reforms to market structure to enhance gilt repo market resilience. The paper will be exploratory and will aim to gather market participants’ views on potential options to help mitigate vulnerabilities, including greater central clearing of gilt repo and minimum haircuts on non-centrally cleared repos.