BoE official signals tough stance on CCP skin in the game

Default waterfalls must include a second tranche of CCP capital, says Cunliffe

Sir John Cunliffe
John Cunliffe, bank of England

UK clearing houses will have to contribute additional prefunded resources to their default waterfalls if lawmakers approve a proposed expansion of the resolution regime for central counterparties (CCPs), a senior regulator has said.

New legislation pending in the UK would require CCPs to produce resolution plans and provide another tranche of their own capital, known as skin in the game, to cover a defaulting member’s losses if other resources are insufficient.

“It will give us some extra

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