A floored plan: Europe’s CCP recovery rules draw fire

CCPs and clearing members both unhappy with proposed allocation of non-default losses

It is often said the best compromises are the ones where both sides are dissatisfied with the outcome. If that’s true, then the European Parliament has found the perfect balance on the question of how central counterparties (CCPs) should handle losses that do not arise from clearing member defaults.

Both CCPs and clearing members have reacted with irritation to the Parliament’s proposed floor that sets the minimum amount of non-default losses CCPs must bear before passing on further losses to

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