Drilling for default: dry run gives CCPs a Lehman-like lesson

Member default simulation finds standardisation and porting could help in a crisis, and moots unscheduled repeat drill

In November 2023, CCP Global – the trade body for central counterparties – co-ordinated an international default simulation to see how clearing houses and members could cope with the failure of a major member firm.

The fire drill – dubbed CIDS, or CCP international default simulation – was designed to see if the industry could put out a fake blaze on the scale of 2008’s Lehman Brothers conflagration. Its findings were issued in May.

During simulated emergency auctions, members bid on the

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