Industry confronts hard choices in CCP recovery debate

CCPs have ways to boost financial strength – none straightforward

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It is often said that learning to recover from mistakes is more important than trying not to make any at all, but critics of swap market clearing houses claim the sector has got it the wrong way round – investing heavily in the infrastructure required to clear swaps, while the resources and practices that would set them back on their feet after a heavy loss remain scarily inadequate.

At the core of the issue is how CCPs would recover from the default of one or more of their clearing members with

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