FIA, IIF, and ISDA have responded to the Financial Stability Board's consultation report on financial resources and tools for CCP resolution. The response emphasises key concerns regarding the proposed approach, citing the need for increased transparency and predictability in resolution scenarios.
The joint response stresses the importance of well-calibrated equity for CCPs and promoting proper incentives for risk management across the recovery and resolution continuum. Additionally, the response urges caution against over-reliance on tools like cash calls and variation margin gains haircutting, as they could detrimentally impact market confidence and pose serious risks to financial stability.
The response also delves into an analysis of the seven resolution tools considered in the FSB consultation.
Read the response in full.
- CCP Recovery and Resolution
- Operational and Regulatory Guidance