Supervisors split over flexibility in CCP resolution

European regulators square off over predictability of spillover losses

Spillover effect
The spillover effect: who should be liable for losses incurred after default of a CCP member?

The level of flexibility regulators would enjoy to deal with spillover losses has emerged as a key battleground as the European Commission hammers out a draft legislative proposal on recovery and resolution for central counterparties (CCPs).

The proposal, which has been heavily delayed and is now due in November, was discussed at a meeting of prudential regulators from all European Union member states on June 27. Two sources with knowledge of the talks say a divide emerged between those who want

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