LME Clear stretched by CCP stress tests
Metals clearing house would exhaust prefunded resources under Esma’s default shock scenario
The clearing house for the London Metal Exchange (LME) would burn through all its prefunded default resources in a severe market crisis, a European Union-wide stress test of central counterparties shows.
Under a doomsday scenario set in March 2019 in which the CCP’s top two clearing members collapse, LME Clear would incur about €712 million ($808 million) of losses beyond the required initial
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