Eurex warns limiting CCP recovery plans could be "very dangerous"

danger

It could be dangerous to require a central counterparty (CCP) to set out in advance an inflexible plan to recover from a severe loss, Eurex has warned - because it may not work in all conditions.

The issue was raised at the end of last month by the Bank of England (BoE), in a paper on loss allocation at a damaged CCP. It notes that clearing houses have the ability to write into their rulebook the steps they would take when the rest of the waterfall of resources has been wiped out and lays out

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