US-European divergence over default funds

Quotes of the quarter

Ignacio Solloa, deputy chief executive of Madrid-based central counterparty MEFF
Our philosophy has always been to have a relatively small default fund. We didn’t have a default fund until recently because our philosophy was to have a loss-sharing mechanism as small as possible. The risks have to be identified and covered by the risk-bearing member. If a member is producing risk, that should be covered by the collateral and the margins you require from that member. Only as a last resort should yo