The International Swaps and Derivatives Association has published a paper concerning principles for central counterparty (CCP) recovery. The paper examines:
- the adequacy and structure of a CCP’s loss-absorbing resources; and
- crisis management planning in the form of a clearly defined and transparent recovery and resolution framework for CCPs when losses threaten to exceed their loss-absorbing resources.
In addition to examining the above, the paper outlines some common principles and highlights key items for discussion.
View ISDA – Risk Management, 25 November 2014