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FIA and ISDA urge Bank of England to take global approach to CCP stress testing

5 January 2022

FIA and the International Swaps and Derivatives Association welcomed a consultation by the Bank of England on supervisory stress testing of central counterparties. The associations together agreed overall with the presented approach. However, given the "huge effort" needed to run supervisory stress tests, they urged the Bank to join with other regulators and run joint stress tests.

Other points made in the consultation response by the Associations include:

  • Welcoming the inclusion of operational scenarios, especially stressing of porting assumptions and propose to also include non‐default losses as a result of defaults.
  • Proposing to not only use plausible scenarios, but also include scenarios that probe recovery and resolution situations.
  • Proposing to analyse contagion risk, for instance by linking the losses at CCPs to the available resourced of clearing members.
  • Proposing additional disclosure, including some disclosure specific to each clearing member

Read a copy of the full response.

  • FIA
  • Capital
  • CCP Risk
  • Advocacy
  • UK
  • Clearing
  • Advocacy
  • Public Policy Submissions
  • Regulatory Responses