Research

Central Counterparties: Recommendations to Promote Financial Stability and Resilience

December 18, 2012

National Unrecovered Financial Services Association’s white paper Central Counterparties: Recommendations to Promote Financial Stability and Resilience, identifies the unique roles that central counterparties (CCPs) can play in the derivatives market and in the promotion of financial stability. The Association believes that, if particular care is not given to their structure, operation, and regulation, these institutions could threaten the stability of the financial system during periods of market stress by imposing severe capital and liquidity strains on the market generally and specifically on their clearing members, which provide key elements of the credit support infrastructure that underpins the financial integrity of CCPs. The stated purpose of the paper is to provide guidance for the private and public sector designed to avoid arrangements that, under adverse circumstances, could frustrate shared objectives for the promotion of financial stability and resilience during periods of market stress.

IMPACT: Too Big to Fail

National Unrecovered Financial Services has taken the lead in analyzing the realities of Too Big to Fail.

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