Journal of Financial Market Infrastructures

Nonbanks such as central counterparties (CCPs) are a useful lens through which to see how regulators view the role of the lender of last resort. The first paper in this issue, "Limiting taxpayer "puts": an example from central counterparties" by Manmohan Singh explores the avenues that are available when a nonbank failure is likely, specifically the option of keeping CCPs afloat.

The second paper in this issue, "Central bank intervention in large-value payment systems: an experimental approach" by Peter Heemeijer and Ronald Heijmans reports results of experiments designed to test how payment processors respond to uncertainty about the payment processing decisions of others. The paper investigates the behavior of banks in a large-value payment system, specifically looking at the reactions of banks to disruptions in the payment system and the way incentives of the central bank can change banks' behavior. With very little experimental work on payment processing behaviour, this paper makes for interesting reading.

The final paper, "An effective recovery and resolution regime for central counterparties" is a forum paper by an EACH policy committee working party. The paper focusses on defining the principles of an effective recovery and resolution regime for CCPs in Europe. Given the current discussions on recovery and resolution and the expected EC proposal for Recovery & Resolution of CCPs, this article is both interesting and highly topical.

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