Wednesday September 20 2023
News Source: Global Exchanges
Focus: Clearing & Settlement
Type: General
Country: European Union
On 19th September 2023, the Financial Stability Board (FSB) published a consultation report on the financial resources and tools for central counterparty (CCP) resolution.
The report presents the outcome of the FSB’s qualitative analysis of a set of financial resources and tools for resolution:
- bail-in bonds;
- resolution funds;
- resolution-specific insurance;
- resolution-specific third-party contractual support;
- resolution cash calls;
- statutory or contractual variation margin gains haircutting for resolution; and
- equity in a first-loss position.
The resources and tools were assessed against the relevant considerations for financial resources set out in the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes) and accompanying guidance on CCP resolution.
The analysis finds that resolution authorities may benefit from having access to a combination of complementary resources and tools to achieve a successful CCP resolution. This is because resources and tools have different strengths and weaknesses. They are also likely to have different effects on financial stability.
The FSB will monitor implementation for CCPs that are systemically important in more than one jurisdiction (SI>1 CCPs) through the FSB’s annual Resolvability Assessment Process and Crisis Management Group monitoring. The findings will be published in the FSB’s annual resolution report.
The FSB invites comments on the report and associated questions, including supporting evidence where available. Responses should be sent to fsb@fsb.org by 20th November 2023 with the title “CCP resolution resources and tools”.
Click on the above link for further information
