Large banks safer for CCPs than they get credit for
Plentiful pre-positioned liquidity softens the blow of resolution, new research argues
The risk to a central counterparty from the failure of a systemic bank may be overblown because of the substantial amounts of pre-positioned liquidity that banks have had to maintain since the global financial crisis, new research states.
Post-crisis regulations called for bolstering the on-balance sheet liquidity profiles of global systemically important banks (G-Sibs) and giving CCPs first crack at these assets in the event of a bank failure. The biggest banks must keep high-quality liquid
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