Regulators may consider portability in CCP fire drills

BoE, BaFin and CFTC move signals concern over whether client positions can be moved between banks in a crisis

Moving packages in a warehouse
Shifting positions: regulators concerned over transfer of client positions between clearing members

The Bank of England, along with regulators in the US and Germany, is considering testing the capacity of clearing members to absorb the client positions of failed banks in upcoming clearing house fire drills – a sign that supervisors are concerned about growing levels of concentration in clearing provision.

The drills, which will be expanded this year to include CME Group in addition to LCH and Eurex, are a simulation of whether a central counterparty (CCP) is able to continue its operations in

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